A dispute between the American Red Cross and the U.S. Justice Department has heated up over the interpretation of U.S. antitrust law. The Justice Department has backed a key legal claim from a biomedical company, Verax Biomedical, against the Red Cross. Lawyers for the Red Cross argued that the nonprofit organization is not subject to the Sherman Act federal antitrust law, but the Justice Department refused and asserted that the Red Cross is separate from the federal government and is liable to the law.
In their lawsuit, Verax Biomedical alleges that the Red Cross is using their market dominance in the field of blood platelets to suppress competition for anti-contamination services. The Red Cross referred to the government’s argument as “novel” and warned that it could lead to other organizations that fulfill ‘vital government functions’ to become liable to federal antitrust law. In opposition, the Justice Department stated the Red Cross “made a misreading of the law”. Verax Biomedical fully supported the Justice Department’s assertions, referring to their statement and arguments as “comprehensive and persuasive”.
Although the Justice Department did not argue that the Red Cross should be found liable for antitrust violations, their argument indicates a possible change in the legal stance towards nonprofit organizations and monopolies. It remains to be seen how this case will unfold, and how other entities may be affected by it. The case is Verax Biomedical Inc v. American National Red Cross, U.S. District Court for the District of Massachusetts, No. 1:23-cv-10335-PBS.