Mother Jones Article Highlights AAI Remarks on the Perils of Antitrust Immunity for Medical Supplies Distributors During the COVID-19 Crisis
Mother Jones journalist Stephanie Mencimer highlighted remarks by AAI’s Laura Alexander and Diana Moss in Jared Kushner Had One Job: Solve America’s Supply Crisis. He Helped Private Companies Instead. AAI experts comment on the temporary antitrust immunity granted to U.S. medical supplies distributors under “Project Airbridge” in passages from the article below:
In normal times, collaboration between companies that dominate such a large share of the market could trigger a federal antitrust investigation. But the administration gave big distributors a pass on some enforcement of antitrust laws while they worked on the project. Those are fair trade measures designed to prevent big corporations from engaging in anticompetitive practices, such as price fixing, bid rigging, or conspiring to push smaller competitors out of the market. In early April, the Justice Department said it would allow the companies to collaborate because of the extraordinary demands of responding to the coronavirus pandemic. When assistant attorney general for the antitrust division (and former Google lobbyist) Makan Delrahim approved the antitrust waiver, he indicated that the companies would be helping HHS to “understand competitive prices for these supplies and medications” and “negotiate competitive prices.” The companies pledged not to engage in “profiteering,” although DOJ never said how it would ensure that didn’t happen.
Laura Alexander, vice president of policy at the American Antitrust Institute, says the arrangement is troubling. “The very companies that [sought] permission to engage in coordination are those that have a long history of anticompetitive conduct and anticompetitive collaboration,” she says.
Consumer advocates and small businesses also fear that the DOJ’s antitrust waivers given through Project Airbridge may allow medical distribution behemoths to completely crush what’s left of their competition during the pandemic, further weakening supply chains. For instance, Medline told ABC News in April that it was selling PPE at a loss and wasn’t charging customers extra for the expedited service it got through Project Airbridge. That might just be welcome corporate do-gooderism during a national crisis. But Diana Moss, president of the American Antitrust Institute, says that selling goods below cost is also known as “predatory pricing” in antitrust parlance. It’s a time-honored way of forcing smaller competitors out of the market because they can’t afford to match the artificially low prices. Moss doesn’t want to imply that this is Medline’s strategy, but in general, “That’s exactly the kind of conduct we worry about” with the antitrust immunity DOJ granted to the Project Airbridge companies, she says. “That would be a big red flag.”