In the interest of public health, FTC and DOJ staff are working remotely, with limited exceptions. As a result:
- The agencies have implemented a novel e-filing system for Hart-Scott Rodino (HSR) Act merger notifications; submissions must be made using an Accellion file-transfer platform, but otherwise the form and filing requirements are largely unchanged.
- The agencies are shifting essentially all meetings to telephone or video conference, including external meetings with parties engaged in merger review and other investigations.
- The DOJ intends to postpone all scheduled depositions and to reschedule them to be conducted by videoconference.
The e-filing system for HSR notifications is expected to remain in place for as long as the agencies are constrained to have staff working remotely, but the agencies aim for review of HSR filings to continue as normal. Several changes, however, are noteworthy:
- Following a two-week suspension, early termination of the HSR waiting period is available as of March 30, 2020. The FTC cautions, however, that grants of early termination will be fewer and farther between. Early termination is a privilege, not a right. The agencies are prioritizing resources to address competition concerns, but no transaction will receive early termination if doubts remain about its effect on competition. At any time, the agencies may decide to suspend early termination decisions again. Transaction parties should assume that their HSR waiting period will be the full statutory period, even in “no issue” deals, until experience demonstrates how the agencies are approaching early termination in practice.
- During this period of disruption, it may be more frequently advisable to withdraw and refile an HSR notification, restarting the 30-day waiting period (“pull and refile”). Traditionally, this tactic has been appropriate only for a narrow set of cases where an extension of the review period appears likely to be sufficient for agency staff to determine that a request for additional information (“Second Request”) is unnecessary. With disruption to the agencies’ operations, there may be a larger set of transactions where staff need additional time to confirm that a Second Request is unnecessary. Pull-and-refile letters should still be submitted as normal (by email), subject to discussion with staff.
- Parties should also consider whether their transaction raises complex substantive issue that might be more difficult to address while the agencies operations are disrupted, thus increasing the likelihood of receiving a Second Request that might ordinarily have been avoided. For pending transactions or proposed transactions that may be subject to a Second Request, the DOJ will be adding 30 days to the extension it seeks in timing agreements negotiated with the parties. The DOJ’s model timing agreement proposes a 60-day waiting period following the parties’ substantial compliance with a Second Request, so the DOJ now will be seeking a 90-day waiting period following substantial compliance. It is likely that the FTC will take a similar approach.
While many of these changes are meant to flatten the curve in response to the COVID-19 pandemic, they will also impact the timing and completion of current and upcoming merger reviews. Parties should factor in the additional time it will take to address these changes, and Pillsbury’s experienced antitrust team would be happy to advise you on the implications for your transaction.
(Note this alert has been updated to reflect new developments as of March 31, 2020.)
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