Transactions that meet the Hart-Scott-Rodino thresholds for notification must be reported to the Federal Trade Commission (“FTC”) and Department of Justice. Where a notified transaction raises competition concerns, the reviewing agency may decide to launch an in-depth investigation and request additional information from the merging parties, known as a “Second Request,” which can take several months and cost companies millions of dollars to fully respond. Under FTC Acting Chairwoman Maureen Ohlhausen’s leadership, however, the burden of a Second Request may decrease, as she intends to narrow their scope.
- Acting Chairwoman Ohlhausen has signaled that Second Requests will be more limited under her leadership, based on comments made on February 15, 2017 at a Washington conference.
- The standard for initiating a Second Request will not change. However, once initiated, Second Requests will be narrower in scope, in terms of markets assessed and data requested from companies.
WHAT THIS MEANS:
- The standard used by the FTC to initiate such investigations will not change; thus, complex transactions raising competition concerns will likely still face a Second Request.
- However, the time and cost associated with complying with a Second Request may be reduced, which will be good news for companies who may face a shorter review at a lower cost.
- This business-friendly approach is consistent with Commissioner Ohlhausen’s guiding principles of “regulatory humility, […] the power of competitive markets, and a devotion to empiricism” and her objective to “minimiz[e] the burdens on legitimate businesses”. As such, it may be one of further changes to come in FTC enforcement.