FTC Announces Merger Review Reforms: Reforms Designed to Ease Burden of “Second Requests”

Clients contemplating mergers that have potential antitrust issues should be aware of some significant reforms to the merger review process announced yesterday by the FTC. The reforms, which take effect for FTC investigations resulting from Hart-Scott-Rodino filings submitted starting today, are intended to reduce the burgeoning time and cost associated with complying with so-called “Second Requests,” the often burdensome government demand for documents and information in the investigation of transactions that raise antitrust issues. The merger review process authorized by the Hart-Scott-Rodino Act permits the FTC or the Department of Justice (DOJ) to review the competitive effects of transactions over a certain size before the parties can close. DOJ has not yet issued a similar set of reforms but is widely expected to do so in the near future.

In part because of the explosion in the use of email and other electronic documents, the size of Second Request document production has increased exponentially, often resulting in months of delay and many millions of dollars in costs. The reforms announced yesterday should substantially reduce the time and cost for transactions that receive detailed antitrust review at the FTC.

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