Justice Department Will Not Oppose Proposal to Form Textile Rental and Laundry Services Joint Venture

On August 8, the DOJ announced it would not oppose a proposal which would allow 10 textile maintenance companies to bid jointly to provide textile rental and laundry services to national healthcare outpatient centers. Based on representations made in the proposal by Linen Systems for Healthcare LLC, the DOJ concluded that the proposed joint venture is not likely to produce anticompetitive effects and could create a new competitor for national accounts.
The DOJ's position was stated in a business review letter from Thomas O. Barnett, Assistant Attorney General in charge of the Antitrust Division, to counsel for Linen Systems for Healthcare. “The proposed joint venture creates a new competitor for national healthcare outpatient center accounts without threatening to restrict output or harm competition among MEDtegrity members,” Barnett said in the letter.

Linen Systems for Healthcare requested a business review letter expressing the DOJ's enforcement intentions regarding the formation of the joint venture, which will operate under the name MEDtegrity. The proposed members seek to compete better for national account business from various types of healthcare outpatient centers. The proposal states that the growing number of national accounts seeking a single-source supplier of textile and rental services has left the 10 local suppliers at a competitive disadvantage against larger, multi-plant companies.

Andre P. Barlow
202-589-1838
abarlow@dbmlawgroup.com