Locke Lord QuickStudy: Demand for Health and Cleaning Products in the Wake of COVID-19 Amplifies Scrutiny of Antitrust Concerns

On Monday, March 9, 2020, the United States Department of Justice (“DOJ”) issued a press release officially cautioning the “business community” against engaging in price fixing or other antitrust violations in connection with the manufacture, distribution, or sale of products in high demand due to the COVID-19 outbreak such as face masks and respirators. The DOJ indicated they would “be on high alert for collusive practices,” particularly with respect to the sale of these products to governmental entities.¹

The DOJ warning follows in the footsteps of increased regulatory scrutiny over technology companies and online platforms in recent months. Big tech firms face active investigations from multiple government agencies—and the regulators are looking at the past, as well as at the present.² The Federal Trade Commission (“FTC”) even established a task force aimed specifically at anticompetitive conduct in technology and online platform markets,³ but has yet to issue any real guidance in the space. Congress is also in on the action, with Senators urging regulators to act.  As recently as March 10, 2020, the Senate Antitrust Subcommittee heard testimony from Yelp about its concerns that Google favors its own products in searches to customers’ detriment. A lot has changed since the FTC concluded its 2013 investigation of whether Google’s search results ranking practices were biased in favor of its own content with no finding of misconduct.⁴

Consumers and regulators alike are directing unprecedented attention to technology firms and online shopping platforms.

While the major focus appears to be on the four major big tech firms at the moment, attention is likely to spread as consumers turn to other retailers to stock up. All companies that sell products in great demand at the moment due to COVID-19—regardless of their size and market power—would be well-advised to take a look at their pricing algorithms (especially any price optimization tools), supply chains, and any information sharing mechanisms to ensure that they are antitrust compliant. Counsel should familiarize themselves with the various inputs of any pricing algorithms to ensure each is supported by a legitimate business purpose and confirm what, if any, information related to pricing is shared outside of the company. It may be a good time to remind employees of antitrust do’s and don’ts as companies struggle to keep up with demand and price products appropriately during this unique and stressful time.

Visit our COVID-19 Resource Center often for up-to-date information to help you stay informed of the legal issues related to COVID-19.

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1 The full press release is available here.
2 TC to Examine Past Acquisitions by Large Technology Companies (February 11, 2020); Justice Department Reviewing the Practices of Market-Leading Online Platforms (July 23, 2019).
3 FTC’s Bureau of Competition Launces Task Force to Monitor Technology Markets (February 26, 2019).
4 Statement of the Federal Trade Commission Regarding Google’s Search Practices, In the Matter of Google Inc., FTC File Number 111-0163 (January 3, 2013).