Information Sharing to Face Heightened DOJ Antitrust Scrutiny (1)

The Justice Department plans to heighten its scrutiny of competing companies’ pricing and other information sharing practices, concerned that they can enable illegal collusion.

The department’s antitrust division is withdrawing—with no plans to replace—a trio of policy statements outlining permissible conduct related to information sharing in the healthcare industry issued between 1993 and 2011, Principal Deputy Attorney General Doha Mekki said Thursday at an antitrust conference in Miami.

These safe harbor statements have been broadly interpreted by health care and other sector companies to share information.

Some exchanges can enable price and wage fixing and other forms of illegal conduct, Mekki said.

Industries from meatpacking to real estate operate using such information-sharing exchanges. The antitrust enforcement agencies have long presumed that such exchanges are legal if the information is anonymized, aggregated and backward-looking.

But changing healthcare market realities, greater use of algorithms, the speed of data and the ability of firms to de-anonymize sensitive information require new scrutiny, Mekki said at a GCR Live: Law Leaders Global event.

“Given these changes and the outdated nature of many of the exchanges reflected in those documents, we are no longer confident that these statements fully reflect existing market realities or the full scope of liability under the antitrust laws,” Mekki said.

Merging companies with a history of sharing competitively sensitive information with other firms will face heightened review, Mekki said. Getting approval for a deal will be an “uphill battle” for a company that has engaged in collusion, she said.

Previous assumptions about industries that aren’t highly concentrated—that their information sharing, allowed under the DOJ’s safe harbor, wouldn’t likely violate the Sherman Act—is coming into question, Mekki said. The pace of technology could enable types of information sharing that the DOJ’s old guidance never envisioned, she said.

Scrutiny of information-sharing practices has spiked recently.

The Justice Department in July fined several poultry producers—Cargill, Sanderson Farms and Wayne Farms—$84.8 million for colluding on wages and benefits for their employees via data firm Webber, Meng, Sahl and Company. The data firm and its president were banned from the industry.

Dozens of plaintiffs sued meatpacking companies and the data firm Agri Stats for alleged pricing collusion over the last few years.

Renters sued a series of corporate landlords and the data company RealPage for coordinating to set rent and lease options.