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Law360 (March 27, 2020, 8:08 PM EDT ) U.S. antitrust enforcers on Monday will resume a long-standing policy that allows some merger reviews to be cut short, after suspending the practice to implement a new e-filing system in response to COVID-19 earlier this month.
The Federal Trade Commission and U.S. Department of Justice stopped accepting hard-copy and DVD submissions for mergers on March 13 over concerns surrounding the coronavirus pandemic. The agencies had rolled out a new system to accept the notifications online by the following week, but said early terminations on merger reviews would not be granted while the temporary system is in place.
On Friday, Ian Conner, director of the FTC's Bureau of Competition, said in a blog post that the e-filing program's success so far means the agencies can resume early terminations on March 30, though he said there would be changes to the ordinary process. Early terminations are typically granted at merging parties' request when a deal poses no antitrust concerns.
"Our teams are working very hard under difficult circumstances to ensure that competition and consumers are fully protected despite the challenges caused by the pandemic," Conner said. "In the meantime, we thank you for your continued understanding."
Under the Hart-Scott-Rodino Act, merging companies have to notify the FTC and DOJ ahead of time about mergers that reach certain thresholds. The agencies then have 30 days to review most deals and either let them through or request additional information from the parties, triggering a second waiting period.
In response to the coronavirus, the DOJ Antitrust Division said March 17 that it would be asking merging parties for an additional 30 days to complete its reviews after they turn over the information requested.
But the FTC and DOJ can also end the initial waiting period early without a second request if neither agency finds a deal is problematic. Companies can usually request early terminations on their HSR forms or after the fact through hard-copy letters. However, Conner said in Friday's post that parties should not reach out to request early terminations for the time being or try to lobby staff to end reviews early.
"We understand that all parties who request it would like early termination of the waiting period, but current conditions require us to prioritize processing filings that raise competitive concerns," Conner said. "Forcing our staff to spend additional time engaging with parties or their counsel will slow our review, not expedite it, and will increase the stress on the premerger program."
Conner also stressed that early termination is not a right and said that during the pandemic crisis it will be granted in fewer cases and more slowly than has historically been the case.
The legal and investigative standards employed by the competition bureau will not change during the pandemic, Conner said, and when it can't eliminate concerns during the initial waiting period, it will issue a second request to continue the investigation, just as it usually does.
"Accordingly, and consistent with the bureau's normal practice, investigations will not be closed if doubts remain, and early termination will not be granted for any transaction for which enforcement action may be necessary," the post said.
Conner also noted that the situation is fluid and that the policy on early terminations could be changed or rescinded at any time.
--Additional reporting Nadia Dreid and Bryan Koenig. Editing by Alanna Weissman.
For a reprint of this article, please contact reprints@law360.com.
