Federal antitrust laws are highly complex, and it can often be difficult to identify whether certain conduct is in violation of the law or simply a result of the current market. The following are three examples of how healthcare companies might be accused of undermining competition in violation of antitrust laws.
Entering into Agreements Not to Compete
Section 1 of the Sherman Act prohibits companies from entering into agreements that they will limit competition or not actively compete with one another. Some agreements are per se violations, including agreements to divide up groups of patients or territories. A proven violation involving this type of agreement can result in criminal allegations, fines, and even a prison sentence.
Other types of agreements might or might not be prohibited, depending on how they impact competition. These agreements are examined under a “rule of reason” standard. This type of allegation often requires economic analysis of possible impacts of the agreement and proving a violation can be more costly and challenging.
One or More Entities Try to Secure a Monopoly
Section 2 of the Sherman Act prohibits attempts to monopolize or successful monopolization of a market. This type of violation does not require that the accusing party prove there is an agreement between companies, as it only requires one entity to commit this type of violation.
Proving violations involving monopolies requires sufficient evidence that a healthcare company already has purposely attained a monopoly of a certain market or that there is a dangerous probability that the company will succeed at obtaining a monopoly. Sometimes, companies might have control of a market due to the nature of that market, and not due to unlawful actions. There must be proof the company engaged in conduct that it expected to result in the sabotage of other competing companies, or that the company otherwise sought unjust securement of the market.
One example of this might be a hospital that secures exclusive agreements with health insurers, which prevents other hospitals from being able to compete in the area as they cannot secure the necessary insurance contracts.
Mergers or Acquisitions that Decrease Competition
Section 7 of the Clayton Act prevents mergers and acquisitions in the healthcare industry – or any industry – that harms competition in the market. Often, anti-competition concerns regarding mergers arise before the deal is finalized, and such allegations can shut down a likely lucrative transaction.
In order for a merger to be in violation of the law, there must be proof that the deal will substantially lessen competition in the area. It is not enough to show that the number of competing entities will be reduced by one. The exception might be if the one company that is eliminated from the market was significantly involved in the local competition.
Contact Our Antitrust Lawyers with a Nationwide Practice
The Law Offices of George M. Sanders, P.C., represents healthcare companies facing antitrust allegations, whether or not they are part of a merger and acquisition. Contact us regarding your concerns today.