Merger Guidance Nine Years in the Making From the FTC

August 27, 2015 Guest Blogger

By Rob Hellewell, Esq., vice president at Conduent

Earlier this month, the Bureau of Competition of the U.S. Federal Trade Commission (FTC) offered updated guidance for merger investigations—the first time it has done so in nine years. Although the Department of Justice’s Antitrust Division has remained silent, these principles likely apply to any transaction pending before either agency.

The update provides three best practice recommendations:

  1. Feed the beast early.
    The early voluntary submission of information to FTC staff—whether before filing or during the initial waiting period—can preempt the agency’s questioning of the transaction and either eliminate the need for a Second Request or reduce its scope. The information parties should submit to expedite the process includes the following:
    • strategic and marketing plans for the last two years;
    • a list of products currently being manufactured, marketed, sold, or developed;
    • a list of the company’s top 10 customers or suppliers, with contact information for customers of overlapping products;
    • a list of top competitors with contact information for those that provide overlapping products;
    • market share information for overlapping products;
    • a list of regular reports that the company prepares; and
    • other information that may assist staff in evaluating the merger and markets involved.
  2. Extend the short HSR initial review period by withdrawing and refiling.
    Parties that need more time to resolve open issues toward the end of an initial review period can withdraw their HSR filing and refile it within two days. The refiling extends the HSR deadlines without the need to pay an additional filing fee and reduces—but does not eliminate—the likelihood that the agency will file a Second Request as a tactic to extend the review.
  3. Negotiate with agency staff to narrow the scope of the Second Request.
    It is possible to reduce the burden of a Second Request and speed compliance and review by working with agency staff to determine the best way to collect information and documents. Parties can share information that explains how they make decisions and store relevant data; organizational charts and data maps can be useful here, as can the attendance of counsel and e-discovery specialists who can speak to the scope and burden of potential discovery.

    Some tips to make the negotiations progress smoothly include the following:

    • provide a list of document custodians,
    • send suggested language along with any requests for modifications to the scope of the Second Request,
    • disclose search terms for review and comment by agency staff, and
    • produce a “Quick Look” of documents targeted to a specific issue or product market that will obviate the need for full compliance with the entire Second Request.

Even More Guidance

On the same day, the FTC also published a new Production Guide, which addresses additional issues such as metadata, data format, load files, and file transfer, and a Model Second Request that contemplates the use of keyword searches, technology-assisted review (TAR), e-mail threading, and deduplication. Respondents that use TAR must be prepared to describe their collection methodology in detail, including:

(a) how the software was utilized to identify responsive documents; (b) the process the Company utilized to identify and validate the seed set documents subject to manual review; (c) the total number of documents reviewed manually; (d) the total number of documents determined nonresponsive without manual review; (e) the process the Company used to determine and validate the accuracy of the automatic determinations of responsiveness and nonresponsiveness; (f) how the Company handled exceptions (“uncategorized documents”); and (g) if the Company’s documents include foreign language documents, whether reviewed manually or by some technology-assisted method.

The Respondent must also share all of its statistical analysis relating to the “precision, recall, accuracy, validation, or quality of its document production” and designate a person to testify about its process.

Suggested Approach

When choosing a strategy for compliance with regulatory demands, organizations should balance their submission of any information against the risks that the agency may use it to contact key customers or suppliers. They should also work with an e-discovery specialist to choose the right technology to accelerate the review without compromising its quality. Finally, they should retain an expert capable of testifying in defense of their chosen methodology.

Rob Hellewell, Esq. is vice president at Conduent. He can be reached at

About the Author


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