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United States: Agencies issue antitrust enforcement statement on post-hurricane relief efforts

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In brief

On 14 September 2021, the US Department of Justice’s Antitrust Division (DOJ) and the US Federal Trade Commission (FTC) issued a Joint Statement (Statement) on antitrust enforcement regarding collaborative relief efforts after Hurricane Ida. The Statement recognizes that collaboration among companies ― even among competitors ― may be necessary and beneficial to assist communities with rebuilding and relief efforts. However, the Statement also makes clear that neither agency will tolerate attempts to subvert competition laws or engage in illegal conduct under the guise of disaster recovery. Both agencies will use their enforcement authority and tools to prosecute anticompetitive and fraudulent conduct taking advantage of hurricane victims or relief efforts. These tools include the DOJ’s Procurement Collusion Strike Force, which has trained 1,500 investigators and has several ongoing investigations.

Key Takeaways 

The agencies recognize that collaborative agreements may be essential to help communities affected by the disaster and to expedite rebuilding efforts. The Statement cites the Antitrust Guidelines for Collaboration Among Competitors, which provide guidance on how businesses can collaborate without violating the antitrust laws. The Statement also provides examples and describes the various benefits of certain business collaborations to respond to disasters. The US agencies issued similar antitrust guidance in the wake of Hurricane Katrina and Rita, as well as guidance for Hurricanes Harvey and Irma in 2017. Likewise, the agencies issued similar guidance during the COVID-19 health crisis.1  Even so, the US antitrust laws are not being relaxed. The Statement makes clear the agencies intend to hold accountable companies and individuals who enter into anticompetitive agreements that exploit hurricane victims or hurricane relief efforts. 

In More Detail 

The statement recognizes that the rebuilding of communities affected by the storm requires cooperation among private businesses and federal, state and local governments. It also highlights numerous business sectors that have been affected by the disaster, including health care, housing, telecommunications, and retail. The agencies acknowledge that collaborative agreements can enable businesses to recover more quickly than working alone. The guidance provides examples of permissible collaborations, including agreements to combine health care services to meet the needs of the affected communities, or to more quickly bring vital supplies to those in need.

The Statement emphasizes that US antitrust laws are sufficiently flexible to allow for these types of competitor collaborations when they are applied with proper scope and length to respond to the disaster.

Companies must not use this flexibility as cover for anticompetitive conduct. As a member of the National Center for Disaster Fraud Task Force, DOJ commits to investigate and prosecute anticompetitive or fraudulent schemes that follow the disaster. Likewise, the FTC will investigate companies or individuals engaging in conduct violating consumer protection laws that target victims of natural disasters. 

The key takeaway is that companies cannot use Hurricane Ida or other natural disasters as an excuse to break the US antitrust laws. The DOJ and FTC have made clear that they will pursue any businesses or individuals who engage in fraudulent conduct, attempt to undermine the competition laws, or disguise illegal conduct as disaster relief efforts.

1. FTC-DOJ Joint Antitrust Statement Regarding COVID-19 – 24 March 2020

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Author

Jeff Martino brings an in-depth understanding of a wide variety of white collar and fraud related matters to his antitrust litigation and investigations practice. Jeff is co-lead of the Firm's Global Cartel Task Force and represents multinational corporations and their boards and executives in high-stakes criminal and civil investigations by the US Department of Justice (DOJ) and other federal and state agencies. Jeff draws upon his extensive criminal investigations, litigation, and enforcement experience to advise clients through sensitive matters pertaining to international cartel actions and white collar investigations. Prior to joining Baker McKenzie, Jeff spent nearly two decades at the DOJ and his last five years as Chief of DOJ Antitrust Division's New York Office. He has extensive experience as "first chair" on trials and investigations in the most complex areas of criminal antitrust and market manipulation. Jeff's work at the DOJ included providing technical assistance to competition agencies in Asia, Africa, the Americas and Europe and overseeing matters that included international corruption and antitrust cartel offenses that entangled the largest global banks and their key executives.

Author

Mark Weiss is a partner in the Firm's North America Antitrust & Competition Practice Group. He is an experienced litigator and counselor with proficiency in antitrust litigation, class-action defense, federal multi-district litigation, and no-poach defense. Mark has vigorously and tirelessly represented clients in a variety of industries including manufacturing, mining, high-tech industries, banking, defense contracting, aerospace, and energy.
As an experienced antitrust counsel, Mark has also conducted cartel investigations and internal compliance reviews, and regularly provides antitrust advice on a broad range of non-litigation matters, including sales and distribution advice, antitrust compliance, competitive merger analysis, and merger clearance strategy.
Prior to joining Baker McKenzie, Mark worked at another global law firm with a focus on class-action antitrust litigation, including defending a global electronics manufacturer from price-fixing and collusion claims, defending a major global financial institution from antitrust collusion and boycott claims, and defending a large government defense contractor from claims alleging illegal no-poach agreements.

Author

Natalie Flores is currently the regional knowledge attorney for North America and Latin America in the Global Antitrust & Competition Group in the Firm's Mexico City Office. She has over ten years of experience as an attorney, and manages and executes regional and global legal content projects, training and client initiatives for the Competition Group within the context of the Firm's knowledge strategy across the region. Natalie oversees all regional knowledge for the antitrust and competition group for the Americas, including develop thought leadership, client training, and publications, amongst other antitrust initiatives for the region, and advises a diverse range of industry clients in multijurisdictional competition matters. She has experience in competition litigation, specifically class action. She is an active member of the Firm's various industry groups, with a focus in the Energy, Mining & Infrastructure group of Baker McKenzie. Natalie is on the Board for Mujeres en Energías Renovables (Women in Renewable Energy) en México (MERM), an association dedicated to promoting the development of women in renewable energy, and concentrates on advocating for renewables and the empowerment of women in the sector.

Author

Kristen is a senior associate in Baker McKenzie's North America Antitrust & Competition Practice Group in Washington, DC. She advises clients on all aspects of antitrust law before the Department of Justice, Federal Trade Commission, US courts, and foreign competition authorities. She also defends clients involved in follow-on civil actions and assists clients with internal investigations and compliance programs.
Kristen also maintains an active pro bono practice. Her recent pro bono matters include obtaining withholding of removal for an individual from Honduras, obtaining USD 900,000 in compensation from the State of Maryland for a wrongfully convicted individual, and representing an individual in an innocence case in West Virginia.
Prior to joining Baker McKenzie, Kristen was a litigation associate working on antitrust matters at another large international law firm.
During law school, Kristen was a legal research and writing fellow and represented clients before the DC Superior Court as a student-attorney in Georgetown's Domestic Violence Clinic. She was also a law clerk for the United States Attorney's Office in Greenbelt, MD.

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