I. Introduction
In his eponymous 1990 hit, Robert Van Winkle—Vanilla Ice—promised: “If there was a problem yo I’ll solve it.” If only the FTC and DOJ (the “Agencies”) could make the same pledge. Instead, their sudden decision to withdraw[1] their Antitrust Guidelines for Collaborations Among Competitors (“Collaboration Guidelines”)[2] has injected uncertainty and ambiguity into the legal and business sector of competitor collaborations. In one fell swoop, the Agencies plunged competitors looking to lawfully work together into a murky enforcement landscape. Businesses and lawyers alike were left wondering why the agencies suddenly withdrew these guidelines, and what case law developments may have contributed to that drastic decision. With increased uncertainty surrounding FTC and DOJ enforcement under the current administration, competitor collaboration is one of many areas where businesses may now feel like they are “grasping in the dark.”[3]
In their joint announcement of the withdrawal, the Agencies stated that the Collaboration Guidelines “no longer provide reliable guidance to the public about how enforcers assess the legality of collaborations involving competitors.”[4] For support, the Agencies pointed to “many significant cases” that have “advance[ed] the jurisprudence.”[5] According to the Agencies, the Collaboration Guidelines “do not reflect this evolution.”[6] While acknowledging that “some specific aspects of the Collaboration Guidelines may accurately reflect the state of the law,” the Agencies’ joint statement encouraged businesses considering collaborating with competitors to “review the relevant statutes and caselaw to assess whether a collaboration would violate the law” instead.[7]
So, what is the state of the law? How has competitor collaboration jurisprudence advanced? Where do the Collaboration Guidelines, as the Agencies say, fail to reflect that evolution? The answer is not so obvious—in fact, the Collaboration Guidelines at first glance remain an accurate, if not broadly stated, summation of how collaborations among competitors can proceed legally and how they are analyzed under the antitrust laws. But there are some areas where the case law has developed in ways that differ from the Collaboration Guidelines. In addition, the withdrawal of the Collaboration Guidelines could have certain practical effects that businesses should be aware of.
This article will highlight the key areas where the case law has deviated from the Collaboration Guidelines. It will then identify the practical impact of those deviations on businesses, and how businesses can avoid antitrust scrutiny in the current jurisprudential landscape. It will also identify areas where the withdrawal of the Collaboration Guidelines may have a significant impact on FTC and DOJ enforcement moving forward.
Three Takeaways:
- With some exceptions, the withdrawal of the Collaboration Guidelines does not change the overall analytical framework. Many of the key cases remain good law. Additionally, most types of collaborations addressed by the Collaboration Guidelines remain procompetitive and are unlikely to raise antitrust concerns. And for those that do, the rule of reason still presumptively applies.
- There are areas where the case law has developed beyond what the Collaboration Guidelines entail. Although it is unclear which of these developments the Agencies believed necessitated the withdrawal, businesses should be aware of these changes and their potential impact on antitrust enforcement moving forward:
-
- The ‘ancillary restraints’ doctrine applies to agreements between competitors that might otherwise be per se illegal but are evaluated under the rule of reason when they support the efficiency of a business relationship. This doctrine, developed through case law, allows courts to analyze restraints on competition that may be necessary to make certain business collaborations effective.
- The ‘quick look’ doctrine is an additional prong in the sliding scale of antitrust scrutiny that has developed through case law. However, it is rarely used, and likely did not—in and of itself—necessitate the withdrawal.
- Reverse payment settlements are exempt from per se illegality and are analyzed under the rule of reason. This represents a deviation from the Collaboration Guidelines, which applies a blanket ‘per se illegal’ approach to agreements that inherently reduce competition. That blanket approach may now be outdated.
3. The withdrawal likely eliminates the Collaboration Guidelines’ “Antitrust Safety Zones,” leaving competitor collaborations involving small market shares and R&D in innovative markets vulnerable to future antitrust scrutiny.
II. What is Competitor Collaboration?
Competitor collaboration refers to an agreement between competing businesses to engage in shared economic activities, such as research and development, production, marketing, or distribution strategies. Such partnerships can help companies reduce costs, accelerate innovation, and improve product quality, ultimately benefiting both businesses and consumers. When done correctly, competitor collaborations can lead to lower prices and better goods and services for the market.
Antitrust laws step in when these collaborations risk harming competition by, for example, increasing consumer costs, reducing competition within an industry, and restricting employee mobility. When competitor collaborations cross the line into anticompetitive behavior, they can violate antitrust laws and expose businesses to legal risks. Competitor collaboration agreements generally fall into four categories: (1) Product Collaborations, (2) Marketing Collaborations, (3) Buying Collaborations, and (4) Research and Development (“R&D”) Collaborations. Each type has procompetitive benefits and potential antitrust risks, depending on how the agreement is structured and whether it negatively impacts competition in the market.
Product Collaborations occur when competing companies work together to produce a product that is either sold to others or used as an input in their respective business. This could involve joint purchasing of materials, shared inventory management, or combined production efforts. Courts have generally viewed such agreements as procompetitive, as they can reduce costs, create efficiencies, and open new markets for participating companies. However, product collaborations that restrict competition or unfairly limit market access for others could raise antitrust concerns.
Marketing Collaborations involve competitors jointly selling, distributing, or promoting goods. While courts have traditionally recognized the procompetitive benefits of expanding market reach and improving product availability, there is also potential for anticompetitive harm. If competitors use a marketing collaboration to dominate a market, restrict independent decision-making, or manipulate pricing, it can reduce competition and trigger antitrust scrutiny. The legality of these agreements often depends on their actual market impact and intent.
Buying Collaborations allow competitors to jointly purchase necessary inputs such as raw materials, supplies, or services. Courts often find these agreements to be procompetitive, as they enable companies to negotiate better prices and reduce costs. Antitrust issues occur when such collaborations increase market power to the point where competitors are unable to access essential materials at fair prices. If two dominant companies collaborate to drive input costs artificially low, they could effectively push smaller competitors out of the market, leading to reduced competition and potential antitrust enforcement actions.
R&D Collaborations occur when competitors work together on innovation, technology development, or scientific research. Courts typically evaluate these agreements under the rule of reason, as joint R&D efforts are often viewed as procompetitive due to their potential to drive innovation and create consumer benefits. Antitrust concerns arise when these agreements consolidate too much market power, limit independent decision-making, or involve companies with exclusive access to key intellectual property or specialized assets. In cases where R&D collaborations reduce competition rather than enhance it, they may be subject to legal challenges.
III. How Has the Case Law Deviated from the Collaboration Guidelines?
In their joint statement, the Agencies claimed that case law developments necessitated the withdrawal of the Collaboration Guidelines. Nonetheless, the majority of cases the Collaboration Guidelines cite remain good law.[8] And cases that cite to the Collaboration Guidelines remain good law as well, even if the Collaboration Guidelines themselves are no longer in effect.[9] Additionally, the analytical framework the Collaboration Guidelines employ is, in general, still applicable and in use today.[10] As such, their withdrawal should not be viewed as the Agencies tossing out all of the Collaboration Guidelines’ principles and guidance. Businesses should instead be aware of the key areas where the case law has developed beyond and in addition to guidance covered in the Collaboration Guidelines. Those areas are described below.
a. Addition of ‘Quick Look’ to Sliding Scale of Antitrust Scrutiny
One significant case law development that the Collaboration Guidelines do not address is the addition of the ‘quick look’ doctrine to the sliding scale of scrutiny. At the time the Collaboration Guidelines were drafted, joint ventures were analyzed using either (1) the per se rule or (2) the rule of reason.[11] Under the per se rule, agreements which “are so likely to harm competition and to have no significant procompetitive benefit that they do not warrant the time and expense required for particularized inquiry into their effects” are considered per se illegal.[12] Those include agreements “that always or almost always tend to raise price or reduce output.”[13] According to the Collaboration Guidelines, “all other agreements are evaluated under the rule of reason.”[14] The rule of reason is a “flexible” test that involves “a factual inquiry into an agreement’s overall competitive effect.”[15]
Before the Collaboration Guidelines were issued, courts also discussed an abbreviated version of the rule of reason, where defendant’s conduct—while not per se illegal—appears so likely to have anticompetitive effects that it is unnecessary for the court to go through a full-blown rule of reason analysis.[16] As described by the United States Supreme Court in NCAA v. Board of Regents, “depending upon the concerted action in question, the Rule of Reason may not require a detailed market analysis; it can sometimes be applied in the twinkling of an eye.”[17] In California Dental Association v. FTC, the Supreme Court specifically addressed when an “abbreviated, or ‘quick-look,’ rule of reason analysis” is appropriate, but did not go so far as to establish it as its own independent prong on the sliding scale.[18]
The Collaboration Guidelines alluded to, without specifically naming, this ‘alternative’ analytical method:
Alternatively, where the likelihood of anticompetitive harm is evident from the nature of the agreement or anticompetitive harm has resulted from an agreement already in operation, then, absent overriding benefits that could offset the anticompetitive harm, the Agencies will challenge the agreement without a detailed market analysis.[19]
In the years since, courts formalized this alternative method and developed the ‘quick look’ doctrine, a legitimate third prong in the analytical sliding scale. Indeed, numerous appellate courts have described the quick look doctrine as an “intermediate standard” of antitrust scrutiny.[20] In Texaco Inc. v. Dagher,[21] the United States Supreme Court recognized that it has “applied the quick look doctrine to business activities that are so plainly anticompetitive that courts need undertake only a cursory examination before imposing antitrust liability,”[22] but declined to do so with regards to the joint venture in question.[23] More recently in NCAA v. Alston,[24] the Supreme Court clarified that the quick look should not be applied where courts have not “amassed considerable experience with the type of restraint at issue and can predict with confidence that it would be invalidated in all or almost all instances.”[25] Said another way, the quick look doctrine does not apply if “the contours of the market . . . are not sufficiently well known or defined to permit the court to ascertain without the aid of extensive market analysis whether the challenged practice impairs competition.”[26]
There are now three different standards of scrutiny that courts use to analyze competitor collaborations: (1) the per se rule; (2) the quick-look doctrine; and (3) the rule of reason. Though oft-discussed, the quick look doctrine is rarely used; the traditional rule of reason analysis still “presumptively applies” when analyzing joint ventures.[27] In fact, the three most commonly cited-to examples of the quick look doctrine are the same Supreme Court cases the Collaboration Guidelines reference: California Dental Association, Indiana Federation of Dentists, and Board of Regents. Thus, while the development of the quick look doctrine is an area where the case law has developed beyond the Collaboration Guidelines, it is unlikely that it necessitated the withdrawal.[28]
Still, businesses collaborating with competitors should be aware that the ‘quick look’ doctrine exists, somewhere between per se illegality and rule of reason scrutiny. As such, businesses should be sure to identify substantial procompetitive benefits that outweigh anticompetitive harms before engaging in collaborations with obvious anticompetitive effects.
b. Development of the ‘Ancillary Restraints’ Doctrine
Ancillary restraints are agreements between competitors that might limit competition in some way but are necessary to make a legitimate business deal work. While the Collaboration Guidelines do not expressly use the term “ancillary restraints,” they explain that agreements normally considered per se illegal, like price fixing, can be evaluated under the rule of reason when they are part of an efficiency-enhancing business relationship.[29] The key is that the restraint must be narrowly tailored and tied directly to the collaboration’s legitimate goals. These agreements should not be used as a way to suppress competition.
Texaco Inc. v. Dagher is illustrative. There, the Supreme Court held that a legitimate joint venture can set prices for its own products without violating antitrust laws.[30] Texaco and Shell Oil had created a joint venture, Equilon Enterprises, which sold gasoline under both brands at a single price.[31] While this might look like price fixing on the surface, the Court determined that Texaco and Shell were no longer competitors while operating under the venture, but were functioning as a single economic entity.[32] The Court highlighted that Texaco and Shell Oil did not compete with one another in the relevant market, but participated in the relevant market together through their investments in Equilon.[33] During Equilon’s existence, Texaco and Shell shared profits of its activities in their role as investors, not competitors.[34] The Court relied on reasoning from another case, Arizona v. Maricopa County Medical Society, where the Supreme Court stated “[when] persons who would otherwise be competitors pool their capital and share the risks of loss as well as opportunity for profit, such joint ventures are regarded as a single firm competing in the market.”[35] In this case, price-setting was implemented to ensure that the joint venture operated efficiently, and not as an attempt to collude in the market. Texaco demonstrated that when companies combine resources and share risk and profits as one entity, their joint pricing may be allowed.[36]
In contrast, courts have been clear that blanket price-fixing between competitors is never acceptable. In United States v. Aiyer, the Second Circuit upheld the conviction of a foreign exchange trader who conspired with others to fix prices and rig bids in the currency market.[37] Aiyer was a trader at JP Morgan and coordinated with other traders at other major banks such as Citibank, Barclays, and UBS to compete in the U.S. Dollar-South African foreign exchange market.[38] Aiyer coordinated with traders at competing banks to share confidential trading strategies and manipulate market prices to benefit their trading positions.[39] Texaco is distinguishable from Aiyer because in Aiyer the traders were all employed at different competing banks and they did not create a joint venture or integrate to share risk or profit in any way.[40] All of the banks were still independently competing in the relevant market.[41] Since these activities constituted a naked price-fixing and bid-rigging scheme, they were found to be per se illegal under the Sherman Act.[42] The Second Circuit made it clear that the government did not need to show actual market harm or hear justifications for efficiency—once collusion is established in this form, it is unlawful.[43]
While the Collaboration Guidelines do not discuss the concept of “ancillary restraints” explicitly, they establish that any restriction between competitors must be necessary, narrowly tailored, and connected to a legitimate collaborative effort. The Texaco court defined the ancillary restraint doctrine but also applied restrictions, clarifying that the actions of joint ventures operating as a single entity do not violate antitrust laws as long as the competing companies do not compete in the same market and profits and risks are shared through the single entity. While Texaco provides some insight into how courts see ancillary restraints, the ancillary restraints doctrine is one area where the Collaboration Guidelines do not provide much insight. To provide additional guidance into what ancillary restraints are, courts have developed two offshoots of the doctrine: (1) no-poach agreements and (2) no-solicitation agreements. Neither are discussed in the Collaboration Guidelines, but businesses engaging in competitor collaborations should be aware of both.
i. No-Poach Agreements
No-poach agreements are deals between two or more companies in which they agree not to hire or solicit each other’s employees. These agreements can raise antitrust concerns when they unreasonably restrict competition in the labor market, making it harder for workers to pursue better opportunities or negotiate higher wages. Issues arise when no-poach agreements reduce employee mobility, suppress wages, function as wage-fixing schemes, or are blanket restrictions applied without a legitimate business reason. These types of agreements are often considered per se illegal under the Sherman Act. While the Collaboration Guidelines do not mention no-poach agreements by name, they suggest that employment-related restraints may be permissible if they are reasonably necessary to a legitimate, efficiency-enhancing collaboration and are narrowly tailored to serve that purpose.[44]
In Deslandes v. McDonald’s USA, LLC, former employees challenged no-poach clauses in McDonald’s franchise agreements. The provisions prevented franchise workers from being hired by another McDonald’s location for six months after leaving their position.[45] The Seventh Circuit rejected the argument that these clauses were per se illegal, instead applying a rule of reason analysis.[46] The court found that McDonald’s could not justify the clauses as ancillary restraints, since they did not directly promote output or efficiency.[47] The Seventh Circuit observed that if the no-poach agreement served a specific purpose such as protecting specific investments in worker training then the no-poach agreement may have been ancillary.[48] The court explained that if franchise “A” invests in training workers and then franchise “B” tried to “poach” the trained workers without investing in training themselves, a time-limited no-poach agreement for franchise “A” could be justified as an ancillary restraint.[49] However, once the training costs are recovered by the franchise, continuing to restrict worker movement could cause antitrust concerns.[50] In Deslandes, this was not the purpose of the no-poach agreement between the franchises, so the court did not find this restraint to be ancillary.[51] The decision in Deslandes shows us that even when part of a broader franchise agreement, a restriction must have a procompetitive purpose to be lawful.[52]
For businesses, this means exercising caution when considering no-poach provisions in collaborative agreements. Companies should ensure any employment restrictions: (1) are directly tied to a legitimate business need, (2) promote collaboration or efficiency, not just employer protection, (3) are time-limited and role-specific, and (4) do not prevent employees from receiving better job offers elsewhere. Courts are not favorable to hiring restrictions that act more like employer protection tools and lack procompetitive benefits.
ii. No-Solicitation Agreements
No-solicitation agreements are similar to no-poach clauses but are generally less restrictive. Rather than prohibiting companies from hiring each other’s employees outright, a no-solicitation agreement typically prevents one company from actively recruiting or soliciting employees from another. However, it does not stop employees from applying or being hired on their own initiative. Courts tend to view these agreements more favorably than no-poach agreements, especially when they have a limited time frame, and their purpose is associated with a specific business reason that enhances efficiency. Although the Collaboration Guidelines do not specifically mention no-solicitation agreements, they describe a framework for these types of restraints, stating that they may be lawful if reasonably necessary to support efficiency or protect shared investments, such as training or confidential information within a joint venture. No-solicitation agreements can still raise antitrust red flags if they suppress wages or reduce competition for skilled workers, prevent fair hiring practices across an industry, lack a legitimate business justification, or are so broad in scope that they restrict hiring across an entire sector. As with any restraint, the question is whether the agreement helps make the collaboration work or whether it is being used to limit competition.
In Aya Healthcare Services v. AMN Healthcare, a travel nursing provider sued a larger staffing agency, alleging that AMN’s no-solicitation agreements unlawfully restrained competition.[53] The agreements prevented subcontractors from recruiting or hiring travel nurses who had been placed through AMN, which Aya argued restricted job mobility and led to inflated pricing for hospital staffing.[54] The Ninth Circuit found that AMN’s agreements were not per se illegal because they were ancillary to a legitimate business collaboration.[55] The court emphasized that these agreements were valid because they protected workforce stability in a highly competitive industry.[56] AMN’s concern was that subcontractors might undermine ongoing placements by poaching workers mid-contract.[57] Applying the rule of reason, the court concluded that AMN’s no-solicitation clauses did not cause substantial harm to competition or consumers.[58]
When incorporating no-solicitation agreements, companies should be mindful to do four things. First, ensure the agreement promotes efficiency rather than restricting competition; for example, by helping preserve workforce stability in an active business collaboration. Second, tailor the agreement to specific roles or operational needs. Third, set reasonable time limits to show the clause is designed to support collaboration and not to prevent workers from pursuing new opportunities. Fourth, make sure the agreement does not inflate prices or limit competition in the labor market.
Antitrust violations are more likely to occur when no-solicitation and no-poach agreements allow companies to implement wage suppression tactics rather than operate as legitimate business safeguards. Now that the Collaboration Guidelines have been withdrawn, case precedent shows companies that they should maintain independent pricing and trading decisions at all times to avoid antitrust liability, unless they are operating within a legitimate, integrated joint venture. Companies should also avoid coordinating pricing, bidding, or market strategy discussions with competitors.
c. Reverse Payment Settlements After FTC v. Actavis
A third topic where the case law differs from the Collaboration Guidelines is reverse payment settlements. Such settlements arise when a generic drug company challenges the validity of a patent held by a drug manufacturer. Because the patent holder has a market advantage and a patent validity challenge threatens the patent holder’s monopoly, the patent holder may pay the challenger to drop the challenge. Such an arrangement is labeled a “reverse payment settlement” because it requires the patent holder to “pay the alleged infringer, rather than the other way around.”[59] Reverse payment settlements are also referred to as “pay-for-delay” agreements, because the agreement typically delays the infringing drug company from entering the market until a specified date.[60]
Most, if not all, reverse payment settlements occur in the context of pharmaceutical drug regulation and typically involve the intersection of patent and antitrust laws. Reverse payment settlements are relevant to competitor collaborations in two ways. First, they involve competitors agreeing not to compete. Second, they sometimes are included as a sub-agreement in conjunction with a joint venture between drug manufacturers, as a ‘non-generic restraint’ that prevents competition between the collaborators on the relevant drug.[61] In both instances, reverse payment settlements operate as an ancillary restraint that prevents a collaborator or competitor from entering the market.[62]
As a form of agreement between drug manufacturers not to compete, reverse payment settlements have inherent anticompetitive effects. Enforcement advocates have long argued that these agreements should be subject to a per se illegality analysis.[63] The Collaboration Guidelines appear to treat reverse payment settlements as per se illegal since they are “agreements of a type that always or almost always tends to raise price or reduce output.”[64] At minimum, practitioners reading the Collaboration Guidelines would likely expect that these settlements need to be reasonably related to a legitimate business objective and support a procompetitive purpose in order to satisfy antitrust laws.[65]
In FTC v. Actavis, Inc., the Supreme Court analyzed the legality of reverse payment settlements.[66] The Supreme Court rejected a per se or other presumptive illegality approach, instead subjecting reverse payments to a rule-of-reason analysis.[67] According to the Court, the “relevant antitrust question” was why the reverse payment was made.[68] A reverse payment settlement agreement may survive a rule of reason analysis where “legitimate justifications . . . are present.”[69] The Supreme Court ultimately held that a reverse payment violates antitrust laws only if it is both (1) “large” and (2) “unjustified” or unexplainable.[70]
Following Actavis, courts have applied a limited rule of reason analysis when analyzing reverse payment settlements. In King Drug Company of Florence, Inc. v. Smithkline Beecham Corporation, the Third Circuit reversed dismissal of a reverse payment settlement claim.[71] The lower district court had ruled that, for a reverse payment to be actionable under Actavis, it must consist of cash.[72] In its reversal, the Third Circuit stated: “we do not believe Actavis’s holding can be limited to reverse payments of cash. We think that a no-AG [authorized generic] agreement, when it represents an unexplained large transfer of value from the patent holder to the alleged infringer may be subject to antitrust scrutiny under the rule of reason.”[73] In Watson Laboratories, Inc., the Second Circuit confirmed that “reverse payments are subject to a familiar rule-of-reason analysis” and that “reverse payments violate the antitrust laws only ‘sometimes.’”[74] The circuit court further stated that Actavis does not compel antitrust scrutiny of a settlement regardless of whether its terms could reasonably be interpreted as a large and unjustified reverse payment, nor does it require plaintiffs to preempt every possible explanation for reverse payment.[75] Instead, Actavis merely imposes a burden on plaintiffs “to affirmatively ‘allege facts sufficient to support a legal conclusion that the settlement at issue involves a large and unjustified reverse payment.’”[76] As these and other courts have confirmed, a blanket rule of reason analysis is now the norm when analyzing reverse payment settlement claims.[77]
Reverse payment settlements have thus carved out their own antitrust niche. Despite being anticompetitive in nature, reverse payment settlements are subject to the rule of reason. Despite being a form of ancillary restraint, reverse payments do not need to be reasonably related to a legitimate business objective or serve a procompetitive purpose. Under Actavis, as long as they are not (1) “large” and (2) “unjustified” or unexplainable, reverse payments do not violate the antitrust laws. As such, the Collaboration Guidelines—Section 3.2 in particular—are no longer relevant to reverse payment settlement agreements, because they are exempt from the Collaboration Guidelines’ per se illegality definition.
Given the above, companies engaging in competitor collaborations should carefully evaluate any settlement agreements or business deals involving competitors—especially when they include payments or benefits that delay market entry or reduce competition. Courts have made clear that such “reverse payments” are subject to scrutiny under the rule of reason. If the value exchanged is both large and unjustified, the agreement may violate antitrust laws. Businesses should be prepared to explain the purpose of the arrangement and demonstrate that it is tied to a legitimate business objective. Agreements that appear to delay competition without justification are likely to face legal challenges.
IV. Elimination of “Antitrust Safety Zones”
Last but certainly not least, the withdrawal of the Collaboration Guidelines raises uncertainty about whether their self-described “Antitrust Safety Zones” still exist. The Collaboration Guidelines articulate two safety zones that “provide participants in a competitor collaboration with a degree of certainty in those situations in which anticompetitive effects are so unlikely that the Agencies presume the arrangements to be lawful without inquiring into particular circumstances.”[78] The two safety zones provide safe harbor for: (1) joint ventures with a market share percentage below twenty percent;[79] and (2) R&D collaboration in an innovation market.[80]
Under the first safety zone, the Agencies do not challenge competitor collaborations “when the market shares of the collaboration and its participants collectively account for no more than twenty percent of each relevant market in which competition may be affected,” absent certain extraordinary circumstances.[81]
Under the second safety zone, the Agencies do not challenge competitor collaborations “in an innovation market where three or more independently controlled research efforts in addition to those of the collaboration possess the required specialized assets or characteristics and the incentive to engage in R&D that is a close substitute for the R&D activity of the collaboration.”[82]
The Collaboration Guidelines may be significant to businesses relying on these safety zones. The Agencies’ joint statement specifically identified them when justifying the withdrawal, stating that the Collaboration Guidelines “risk creating safe harbors that have no basis in federal antitrust statutes.”[83] By that measure, the FTC and DOJ could be signaling that competitor collaborations which previously fell into an identified safety zone may now be subject to antitrust scrutiny. Indeed, this withdrawal follows the Agencies’ withdrawal of two Health Care Enforcement Policy Statements that provided certain safe harbors in the health care industry,[84] along with other similar policy statements and guidelines.[85]
Case law provides little refuge for such collaborations; there are scarce to no cases citing either safety zone. As a result, the safety zones are neither codified by statute nor protected by case law precedent. On the other hand, recent Supreme Court decisions have referenced the absence of so-called safe harbors for joint ventures in any form. For example, in American Needle, Inc. v. National Football League, the Court discussed how joint ventures “have no immunity from antitrust laws.”[86] And in NCAA v. Alston, the Court stated that even for agreements that include efforts aimed at introducing a new product into the marketplace, “a party cannot relabel a restraint as a product feature and declare it ‘immune from § 1 scrutiny.’”[87] Further, the First Circuit in United States v. American Airlines Group Inc. confirmed a lower court’s finding that a collaboration agreement was not necessarily procompetitive just because it enabled innovation.[88] American Needle, Alston, and American Airlines Group were all cited in the Agencies’ Withdrawal Statement as justification for the withdrawal.[89]
Although the future remains unclear, the withdrawal of the Collaboration Guidelines may thus indicate an intent by the Agencies to enforce the antitrust laws on a case-by-case basis and without any safe harbors in place whatsoever. Moving forward, businesses engaging in competitor collaborations should operate under the assumption that these “Antitrust Safety Zones” no longer exist, and that the FTC or DOJ may initiate enforcement actions involving agreements that have been previously protected. If a company is engaged in a competitor collaboration involving less than 20% market share or in an R&D collaboration in an innovation market, that competitor collaboration may be subject to antitrust scrutiny. Therefore, businesses engaging in any type of competitor collaboration should be aware of the analytical approach employed by courts and the Agencies when determining their legality, and should ensure that they are acting within those parameters.
V. Conclusion
When the Agencies suddenly withdrew their Collaboration Guidelines, it was logical to assume they must be out of date—perhaps even as outdated as a Vanilla Ice reference. However, a review of the jurisprudential landscape surrounding competitor collaborations since the Collaboration Guidelines were issued reveals a series of small changes but an analytical framework that remains largely intact. Still, the withdrawal of the Collaboration Guidelines marks a shift in how competitor collaborations may be analyzed by antitrust enforcers in the future. While many of the cases and concepts reflected in the Collaboration Guidelines remain good law, courts have also developed new analytical methods, including the ‘quick look’ and ‘ancillary restraint’ doctrines, that must be considered when entering into competitor collaborations. Businesses should be prepared to demonstrate that their collaborations serve legitimate, procompetitive purposes and are narrowly tailored to avoid suppressing competition. Additionally, businesses should understand that legal compliance will not necessarily depend on the Collaboration Guidelines, but instead on the current and evolving standards courts apply. When in doubt, companies should stop, carefully evaluate the risks associated with any collaboration, and consult with (and listen to) their antitrust attorney.
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The opinions expressed are those of the authors and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] U.S. Dep’t of Justice & Fed. Trade Comm’n, Justice Department and Federal Trade Commission Withdraw Guidelines for Collaboration Among Competitors (Dec. 11, 2024) (“Agencies’ Withdrawal Statement”),
https://www.justice.gov/atr/media/1380001/dl?inline.
[2] Fed. Trade Comm’n & U.S. Dep’t of Justice, Antitrust Guidelines for Collaborations Among Competitors (April 2000) (“Collaboration Guidelines”), https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearings-antitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf.
[3] Dissenting Statement of Commissioner Melissa Holyoak Regarding Withdrawal of 2000 Antitrust Guidelines for Collaboration Among Competitors, No. V250000 (Dec. 11, 2024),
https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-collaboration-guidelines-withdrawal-statement.pdf.
[4] Agencies’ Withdrawal Statement.
[5] Id. (citing NCAA v. Alston, 594 U.S. 69, 88-92 (2021), American Needle Inc. v. NFL, 560 U.S. 183, 191, 202 (2010), Texaco Inc. v. Dagher, 547 U.S. 1, 6 (2006), Deslandes v. McDonald’s USA, LLC, 81 F.4th 699, 702 (7th Cir. 2023), cert. denied, 144 S. Ct. 1057 (2024), and United States v. American Airlines Grp., 121 F.4th 209 (1st Cir. 2024)).
[6] Id.
[7] Id.
[8] See, e.g., Collaboration Guidelines § 3.2 n.15 (citing California Dental Ass’n v. FTC, 526 U.S. 756 (1999), FTC v. Indiana Fed’n of Dentists, 476 U.S. 447 (1986), and NCAA v. Bd. of Regents of the University of Oklahoma, 468 U.S. 85 (1984)).
[9] See, e.g., Am. Airlines Grp., 121 F.4th at 225 (citing Collaboration Guidelines § 3.36).
[10] See, e.g., NCAA v. Alston, 594 U.S. 69 (2021) (applying rule of reason analysis).
[11] See, e.g., National Soc’y of Prof’l. Eng’rs v. United States, 435 U.S. 679, 692 (1978).
[12] Collaboration Guidelines §§ 1.2 (citing National Soc’y of Prof’l. Eng’rs, 435 U.S. at 692), 3.2.
[13] Id. (cleaned up).
[14] Id. § 1.2 (cleaned up).
[15] Id. §§ 1.2, 3.3.
[16] See Nat’l Soc. of Prof’l Eng’rs, 435 U.S. at 692; Bd. of Regents, 468 U.S. at 98; Indiana Fed’n of Dentists, 476 U.S. at 459; California Dental Ass’n, 526 U.S. at 780-81.
[17] Bd. of Regents., 468 U.S. at 104, 109 n.39.
[18] California Dental Ass’n, 526 U.S. at 757.
[19] Guideline § 3.3 (citing California Dental Ass’n, 526 U.S. at 768-71, 778-79, Indiana Fed’n of Dentists, 476 U.S. at 459, and Bd. of Regents., 468 U.S. at 104, 106-10).
[20] See, e.g., Winn-Dixie Stores, Inc. v. E. Mushroom Mktg. Coop., Inc., 89 F.4th 430 (3d Cir. 2023); California ex rel. Harris v. Safeway, Inc., 651 F.3d 1118, 1146 (9th Cir. 2011) (Reinhardt, J., concurring in part); Deutscher Tennis Bund v. ATP Tour, Inc., 610 F.3d 820, (3d Cir. 2010).
[21] Texaco Inc., 547 U.S.
[22] Id. at 7 n.3.
[23] Id. at 8.
[24] Alston, 594 U.S.
[25] Id. at 88.
[26] Deutscher Tennis Bund, 610 F.3d at 832.
[27] See, e.g., Watson Lab’ys, Inc., 101 F.4th 223 (2d Cir. 2024) (applying rule of reason instead of quick look approach to analyze reverse payments); Giordano v. Saks Inc., 654 F. Supp. 3d 174 (E.D.N.Y. 2023) (applying rule of reason instead of quick look approach in finding insufficient evidence to support plaintiff’s claim that no-hire agreements had a direct adverse effect on competition market-wide to support a Sherman Act restraint of trade claim); In re Ins Brokerage Antitrust Litig, 618 F.3d 300, 345 (3d Cir. 2010) (“where a restraint is reasonably necessary to achieve a joint venture’s efficiency-enhancing purposes (i.e., ancillary), it will be analyzed under the rule of reason as part of the joint venture because the effects of that restraint are not so plainly anticompetitive as to make a per se or quick-look approach appropriate.”); Major League Baseball Properties, Inc. v. Salvino, Inc., 542 F.3d 290 (2d Cir. 2008) (analyzing licensing agreement involving joint venture under the rule of reason, not the quick look or per se standard); Worldwide Basketball & Sport Tours, Inc. v. NCAA, 388 F.3d 955 (6th Cir. 2004); but see Agnew v. NCAA, 683 F.3d 328, 336-39 (7th Cir. 2012) (agreeing with Plaintiffs that quick-look doctrine was appropriate framework to analyze Sherman Act claim against joint enterprise, but affirming dismissal for failure to adequately state a claim).
[28] The amorphous nature of the quick look doctrine as its own independent prong was highlighted by the Third Circuit in Winn-Dixie Stores:
If this sounds like a test of “I know it when I see it,” that is not far from the mark. There is no set methodology for determining when the quick look applies, and the Supreme Court has warned against drawing “categorical line[s] . . . between restraints that give rise to an intuitively obvious inference of anticompetitive effect and those that call for more detailed treatment.” Cal. Dental Ass’n, 526 U.S. at 780–81, 119 S.Ct. 1604. The selection process is therefore more “art than science,” and not subject to “[a]n overly-formalistic and literal approach.” In re ATM Fee Antitrust Litig., 554 F. Supp. 2d 1003, 1016 (N.D. Cal. 2008). It boils down to whether we have “amassed ‘considerable experience with the type of restraint at issue’ ” such that we “can predict with confidence that it would be invalidated in all or almost all instances.” Alston, 141 S. Ct. at 2156 (citation omitted).
89 F.4th at 439.
[29] Collaboration Guidelines § 3.2.
[30] Texaco Inc., 547 U.S. at 6-7.
[31] Id. at 4.
[32] Id. at 6-7.
[33] Id.
[34] Id.
[35] Id. (quoting Arizona v. Maricopa Cnty. Medical Soc., 457 U.S. 332, 356 (1982)).
[36] See id. at 6-8.
[37] United States v. Aiyer, 33 F.4th 97, 130 (2d Cir. 2022).
[38] United States v. Aiyer, 470 F. Supp. 3d 383, 393 (S.D.N.Y. 2020).
[39] Aiyer, 33 F.4th at 109.
[40] See Aiyer, 470 F. Supp. 3d at 403-04.
[41] Id. at 393.
[42] Aiyer, 33 F.4th at 111-13.
[43] Id. at 126.
[44] Collaboration Guidelines § 3.36.
[45] Deslandes, 81 F.4th at 702.
[46] Id.
[47] Id. at 704.
[48] Id. at 703.
[49] Id.
[50] Id.
[51] Id.
[52] See id. at 704-05.
[53] Aya Healthcare Servs., Inc. v. AMN Healthcare, Inc., 9 F.4th 1102, 1106 (9th Cir. 2021).
[54] Id. at 1109.
[55] Id. at 1111-12.
[56] See id. at 1112-13.
[57] See id. at 1112.
[58] See id. at 1114.
[59] FTC v. Actavis, Inc., 570 U.S. 136, 141 (2013).
[60] See, e.g., FTC v. AbbVie Inc., 976 F.3d 327, 351 (3d Cir. 2020).
[61] See In re HIV Antitrust Litig., 656 F. Supp. 3d 963 (N.D. Cal. 2023).
[62] See id.
[63] See, e.g., Joshua P. Davis, Applying Litigation Economics to Patent Settlements: Why Reverse Payments Should Be Per Se Illegal, 41 Rutgers L.J. 255 (2009); Joel S. Sprout, Presumptively Illegal: The Supreme Court's Missed Opportunity in FTC v. Actavis, Inc., 42 Cap. U. L. Rev. 763 (2014).
[64] Collaboration Guidelines § 3.2.
[65] See id. §§ 3.2, 3.36-3.7.
[66] Actavis, 570 U.S.
[67] Id. at 158-59.
[68] Id. at 158.
[69] Id. at 156.
[70] Id. at 158.
[71] King Drug Co. of Florence, Inc. v. Smithkline Beecham Corp., 791 F.3d 388 (3d Cir. 2015).
[72] Id. at 405.
[73] Id. at 403.
[74] Watson Lab’ys, Inc., 101 F.4th at 238 (citing Actavis, 570 U.S.).
[75] Id. at 241.
[76] Id. (quoting In re Loestrin 24 Fe Antitrust Litig., 814 F.3d 538, 552 (1st Cir. 2016)).
[77] See, e.g., United Food & Com. Workers Loc. 1776 & Participating Emps. Health & Welfare Fund v. Teikoku Pharma USA, Inc., 74 F. Supp. 3d 1052 (N.D. Cal. 2014); In re Nexium (Esomeprazole) Antitrust Litig., 842 F.3d 34 (1st Cir. 2016); Impax Lab’ys, Inc. v. Fed. Trade Comm’n, 994 F.3d 484 (5th Cir. 2021).
[78] Collaboration Guidelines § 4.1.
[79] Id. § 4.2.
[80] Id. § 4.3.
[81] Id. § 4.2.
[82] Id. § 4.3.
[83] Agencies’ Withdrawal Statement.
[84] Press Release, Federal Trade Commission Withdraws Health Care Enforcement Policy Statements (July 14, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/07/federal-trade-commission-withdraws-health-care-enforcement-policy-statements.
[85] Press Release, Department of Justice, Office of Public Affairs, Justice Department Withdraws Outdated Enforcement Policy Statements (Feb. 3, 2023), https://www.justice.gov/archives/opa/pr/justice-department-withdraws-outdated-enforcement-policy-statements.
[86] Am. Needle, Inc., 560 U.S. at 199 (quoting Bd. of Regents, 468 U.S. at 113).
[87] Alston, 594 U.S. at 101 (quoting Am. Needle, Inc., 560 U.S. at 199 n.7).
[88] Am. Airlines Grp., 121 F.4th at 226.
[89] Agencies’ Withdrawal Statement at n.1
