Navigating the DOJ’s New Express Lane for HSR Merger Reviews
The Department of Justice (DOJ) is putting itself on a tight leash for Hart-Scott-Rodino (HSR) merger reviews. As Assistant Attorney General Makan Delrahim announced at the 2018 Global Antitrust Enforcement Symposium, “most mergers are pro-competitive” and should be allowed to proceed promptly. Unnecessary and avoidable delays introduce “a form of uncertainty and risk” that should be removed whenever possible. Unfortunately, those delays have become a persistent trend — a problem the DOJ is now taking steps to reverse.
Roadblocks: Why Mergers Are Taking Too Long to Review
Over the last several years, the amount of time consumed by the DOJ’s merger review process has ramped up considerably. In 2013, the average time elapsed in review was 7.1 months. By 2017, that was up to 10.8 months — with no sign of a letup.
Delrahim placed primary blame on increasing data volumes, noting that “merging parties frequently maintain enormous quantities of data and documents.” This volume adds to the time it takes parties to produce information and the time it takes the DOJ to analyze it. Data wasn’t the only scapegoat: more mergers today involve international coordination, which slows down the process, and many also require additional time to line up pre-approved buyers.
Those delays aren’t making the review process better. Indeed, Delrahim said, “Nobody wins with unduly lengthy reviews.” Therefore, he announced, the DOJ “will aim to resolve most investigations within six months of filing.” That promise came with an important caveat, though. The six-month aspirational timeline demands that “the parties expeditiously cooperate and comply throughout the entire process.”
Paving a Two-Way Street: Both DOJ and Companies Must Expedite Reviews
Expect to see a faster pace and tighter timelines for merger-related discovery. Consider implementing the following steps so that your merger review can proceed promptly.
Schedule and thoroughly prepare for introductory meetings. The front office of the Antitrust Division “will be open to an initial, introductory meeting” to review and understand the rationale underlying the merger as well as “any other facts [that] will be important to [its] analysis.” Don’t pass up this opportunity or treat it as a formality. Instead, prepare for this meeting as you would for a Rule 26(f) conference. You want to walk in the door with all the information and data analysis you need to not just explain but to close the deal.
Wrangle your data now, before you need it. Businesses can no longer justify waiting until the last minute to become familiar with their data. Nor can they maintain overwhelming and unmanageable quantities of data. Get on track with a defensible deletion protocol immediately so that you can limit the electronically stored information you need to evaluate and ultimately produce. Delrahim announced that parties will be expected to produce documents and especially data “faster and earlier” than before. Be prepared for a “more robust rolling production,” and don’t wait for deadlines to produce information.
Build on the DOJ’s new model voluntary request letter. The DOJ will be providing a model letter to help parties identify the information they will need to submit. This is part of the two-way street that Delrahim repeatedly emphasized, noting that “the sooner we get this information, the sooner we can close investigations.” To that end, start from the generic model letter and, especially, your tailored version of it. Leverage the tools you already use in ediscovery matters to process, review, and analyze your data so you can reduce duplicates and outdated document versions, providing a concise and easy-to-review production that responds to all of the letter’s requests.
Hopefully, the DOJ will smoothly implement these changes and achieve its six-month goal. Take steps today to master your discoverable data so that your merger takes advantage of the expedited process.