US antitrust agencies COVID-19 response: Merger reviews

Updated: March 30, 2020

As the US reacts and adjusts to the developing COVID-19 (coronavirus) situation, the two federal antitrust agencies – the Federal Trade Commission and the US Department of Justice Antitrust Division – have revised certain rules and procedures to their civil merger investigation processes to address these new challenges.  

The FTC and DOJ have shifted most personnel to remote work arrangements, but agency staff have demonstrated a willingness to be reasonable and accommodating as both the agencies and merging parties navigate the developing impacts of COVID-19.  The agencies are in the process of testing the full capacity of their remote work systems. Although our antitrust lawyers have received no indication this is the case, should agency IT systems be unable to support remote access volumes, agency staff may be forced to triage workload to accommodate system limitations. The FTC has indicated it will modify timing agreements where “an unmodified time period does not allow [the FTC] to address competitive concerns.”¹  Similarly, the DOJ has indicated a willingness to “revisit its timing agreements with merging parties in light of further developments.” ²

Norton Rose Fulbright’s antitrust and competition team provides the following update regarding the state of US antitrust transaction reviews.

Parties yet to file Hart-Scott-Rodino submissions

• Need to know: Wholesale change in HSR filing procedure in effect.
• As of Tuesday, March 17, 2020, the FTC and DOJ will only accept HSR filings electronically. No hard copy (paper or DVD) filings are being accepted at this time.
• The agencies initially indicated that they would not grant early termination of the HSR waiting period while this eFiling procedure is in place. However, the FTC, which administers the premerger notification program, announced that the Premerger Notification Office will resume granting early termination of HSR on March 30, 2020 in situations in which both agencies have determined that no enforcement action will be taken during the waiting period. However, Ian Conner, Director of the Bureau of Competition, cautioned that “[e]arly termination will, for the duration of the COVID-19 pandemic crisis, be available on a more limited basis than has historically been the case. Specifically, it will be granted in fewer cases, and more slowly, than under normal circumstances.”³  At this time, parties should not reach out to request early termination, and early termination will be granted only as time and resources allow. 
• Practitioners have observed that new submissions may face the increased likelihood of a Second Request as agency staff adapt to remote working conditions.  
• Filings received after 5:00 pm EST will be treated as if they were submitted the following business day, an important consideration if a transaction is intended to close soon after the HSR waiting period expires.

• Need to know: It is “business as (almost) usual.”  
• We believe both the FTC and DOJ are dedicated to their missions and are moving forward with ongoing investigations. Staff attorneys communicating with our lawyers have indicated that investigations will carry on in a “business as (almost) usual” fashion, the remote work arrangements being the obvious difference.  
• The agencies will conduct all meetings by phone or video conference where possible, absent extenuating circumstances. The agencies are reviewing their investigations and litigations to consider modifying statutory or agreed-to timing. Practitioners are encouraged to be proactive in initiating discussions on these issues and flexible in approach.
• For mergers currently pending in front of the DOJ or that may be proposed, the Antitrust Division is requesting an additional 30 days in timing agreements from merging parties to complete review after the parties have complied with document requests. We believe this extra timing will primarily impact deals in which Second Requests are issued.
  Deal timing may also be impacted by potential legislation. We are not aware of specific provisions impacting the HSR review process at this time.

• Need to know: Be proactive with staff.
• As with transactions involving investigations still in progress, transactions with investigations nearing completion should move forward in a “business as (almost) usual” fashion. However, parties must be proactive in reaching out to agency staff and planning for next steps. While the agencies have demonstrated their ability to adapt to fluid situations, COVID-19 continues to present unprecedented challenges that will require cooperation from all parties involved in the transaction.