Answer ... The parties’ Hart-Scott-Rodino filing triggers a 30-day waiting period (or 15 days for cash tender offers or transfers in bankruptcy). After notification is filed, the Federal Trade Commission (FTC) will review the filing and then one of the two agencies will be assigned to review the transaction. If the reviewing agency takes an interest in the transaction, an attorney from one of the agencies will then contact the parties’ lawyers to request more information. Such initial requests for additional information beyond the filing are informal and responding is voluntary, though failure to respond will potentially lead to an extended review of the transaction. The initial waiting period typically ends in one of the following four ways:

1. The reviewing agency grants ‘early termination’. This means that the agency has concluded that the transaction presents no competitive issue and is ending its investigation early. Parties must request early termination in their initial Hart-Scott-Rodino filing, which they almost invariably do. At the end of every month, the agencies publish a list of transactions for which they have granted early termination. Some parties interested in avoiding this publicity will forgo requesting early termination in their Hart-Scott-Rodino filings.
2. The reviewing agency lets the 30-day (or 15-day, in certain circumstanced described above) clock expire. This signals the end of the agency’s investigation and parties are free to close. Unlike the granting of early termination, the agencies do not acknowledge this event publicly.
3. The parties to the given transaction pull-and-refile their Hart-Scott-Rodino filing. This resets the Hart-Scott-Rodino clock, giving the agencies another 30 days (or 15 days, depending on the type of transaction) to review the transaction. The ability to pull and refile a Hart-Scott-Rodino filing without paying an additional filing fee is a one-time courtesy that the agencies grant parties to a given transaction. The Hart-Scott-Rodino Act does not grant such a right to parities and the agencies cannot, under the law, explicitly request that parties pull and refile. In practice, the investigating staff at the reviewing agency signals the parties via informal communications, with the essential message being that staff has a few remaining questions about the transaction that could likely be resolved with some additional time. The practical purpose of a pull and refile is to give the agencies another 30-day waiting period with the goal of avoiding the issuance of a second request (described below).
4. The last, and least favourable, end to the initial waiting period is the issuance of a second request by the reviewing agency. A second request is an extensive document, data and interrogatory subpoena, whose issuance typically signals that the reviewing agency has significant unresolved concerns about the given transaction. Response to a second request is not voluntary. Upon issuance of the second request, the waiting period is extended until the 30th day (or the 10th day for cash tender offers or transfers in bankruptcy) after the date of substantial compliance with the second request. Parties responding to a second request typically require three to five months to do so. The agencies can issue a second request at their discretion.

Answer ... Given the extensive burden and delay inherent in a second request, parties to any given transaction are typically highly motivated to satisfy any agency concerns during the initial waiting period. To that end, parties to transactions involving potential competitive issues will frequently approach the agencies prior to a Hart-Scott-Rodino filing , essentially inviting them to begin their review of the proposed transaction prior to the initiation of the initial waiting period. Pursuant to this strategy, parties often delay Hart-Scott-Rodino filings for a week or even a month after initially contacting the reviewing agency, thereby giving the reviewing agency more time to potentially resolve concerns and avoid the issuance of a second request, which is the only formal mechanism for suspending the review period once it officially starts with the Hart-Scott-Rodino filing.

Such pre-filing outreach to a given agency typically occurs when there is little question about which agency will ultimately review the given transaction. In the event, parties simply call the relevant staff of the particular DOJ and FTC division responsible for that industry to tell them about the pending transaction. The relevant agency must still obtain clearance to review the transaction, which can take several days. If the transaction involves an industry that is less clearly the responsibility of either the FTC or the DOJ, then such clearance may require more time.

Answer ... As indicated above, the initial waiting period is shortened to 15 days for transactions involving cash tender offers or transfers in bankruptcy. Otherwise, there is no simplified review process for transactions that trigger a Hart-Scott-Rodino filing.

Answer ... The agencies generally place a high priority on cooperation with other antitrust authorities, whether those authorities are international or state level, such as the California or New York attorney general. In either case, the agencies will typically ask the merging parties to submit a waiver of confidentiality, thereby enabling the reviewing agency to communication about otherwise confidential information with the counterpart. The following is a link to the FTC’s model waiver and FAQs regarding international waivers: www.ftc.gov/policy/international/international-competition/international-waivers-confidentiality-ftc-antitrust. The International Antitrust Enforcement Assistance Act of 1994 give the FTC and DOJ authority to sign official agreements with foreign jurisdictions to exchange otherwise confidential information. Internationally, the United States has signed relevant cooperation agreements that officially allow for the sharing of antitrust-related information with various countries and jurisdictions, such as the European Union, Australia, Brazil, Canada, Japan and Mexico.

The following is a link to the FTC and DOJ Protocol for Coordination in Merger Investigations, which governs cooperation between the agencies at state-level authorities: www.ftc.gov/tips-advice/competition-guidance/merger-investigations.

Answer ... A typical merger investigation by the FTC and DOJ begins with limited voluntary requests of information to parties, customers and, potentially, competitors. If such information-gathering efforts fail to satisfy the reviewing agency, both the FTC and DOJ have broad subpoena power to require production of documents, testimony and statements from parties and third parties. The second request is the primary example of this subpoena power. The DOJ’s model second request can be accessed at www.justice.gov/atr/file/706636/download.

Answer ... Third parties can participate both voluntarily and involuntarily. Any party interested in a given transaction is free to contact the reviewing agency and express its opinion of the transaction and voluntarily submit information or advocacy supporting the same.

Answer ... In the case of an asset acquisition, the acquiring entity can close on the acquisition of any otherwise exempt foreign assets. However, in the case of a reportable acquisition of voting securities or non-corporate interests, it is illegal to carve out the US portion and close the transaction elsewhere.

Answer ... The DOJ and FTC investigate mergers under Section 7 of the Clayton Act to determine whether they are likely “substantially to lessen competition”. Section 7 prohibits transactions “where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly”.

The most thorough and authoritative description of how the antitrust authorities apply and analyse the Section 7 test is found in the FTC/DOJ Horizontal Merger Guidelines. The 2010 edition is available at www.justice.gov/sites/default/files/atr/legacy/2010/08/19/hmg-2010.pdf.

Answer ... Generally, the analysis of joint ventures tracks the analysis of a full merger; this is particularly true of any joint ventures that are intended to last 10 years and ultimately eliminate competition between parties. More limited or partial joint ventures are analysed as described in the 2000 Antitrust Guidelines for Collaborations Among Competitors, available at www.ftc.gov/system/files/documents/public_statements/300481/000407ftcdojguidelines.pdf.

Answer ... Two primary theories of harm typically animate a merger investigation:

• Unilateral effects: This type of theory focuses on the market or pricing power gained by the merging parties due to the elimination of competition between them. As explained in the 2010 Horizontal Merger Guidelines: “The elimination of competition between two firms that results from their merger may alone constitute a substantial lessening of competition. Such unilateral effects are most apparent in a merger to monopoly in a relevant market but are by no means limited to that case.”
• Coordinated effects: This type of theory focuses on the increased likelihood of collusion or coordination in the relevant market due to the loss of an acquired competitor or competitors. As the guidelines state: “A merger may diminish competition by enabling or encouraging post-merger coordinated interaction among firms in the relevant market that harms customers. Coordinated interaction involves conduct by multiple firms that is profitable for each of them only because of the accommodating reactions of the others. These reactions can blunt a firm’s incentive to offer customers better deals by undercutting the extent to which such a move would win business away from rivals. They also can enhance a firm’s incentive to raise prices, by assuaging the fear that such a move would lose customers to rivals.”

Within these two broad categories, there are numerous sub-categories. In almost all cases, however, the relevant analysis begins with the delineation of a relevant market and an analysis of the concentration levels pre- and post-transaction within that market.