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M&A Safety Zone Zoned Out


February 23, 2023

As of February 2 the DOJ will be focusing on mergers involving companies with a history of anti-competitive information exchange. The new priority coincides with the withdrawal of three policy statements which permitted information sharing in the healthcare industry. The statements, issued between 1993 and 2011, included guidelines and served as reliable safe harbor provisions in all sectors. Information sharing within those so-called “safety zones” was deemed “very unlikely to raise competitive concerns.” Before the DOJ’s announcement, even information exchanged outside the safety zones could be lawful if they promoted competition, a determination made by balancing potential anti-competitive against pro-competitive justifications. In the article linked above, the Fried Frank firm suggests that companies contemplating merger should “review their current practices and consult with counsel when considering sharing any competitively sensitive information, not just pricing information.” According to the DOJ, mergers between companies with a history of such information exchanges can look forward to an “uphill battle” getting deals approved.

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