The FTC's Bureau of Competition sometimes reviews proposed mergers against the backdrop of civil and criminal antitrust investigations or litigations leveled in the same industry. And at times, such investigations and litigations are leveled against the merger parties themselves. Those ongoing matters may affect our analysis of a merger, as well as the vetting of divestiture packages and proposed divestiture buyers. Even if details of such investigations are not public, Bureau staff are likely to discover their existence during our own investigation of a merger.
In response to increased interest in levels of M&A activity, the Bureau of Competition’s Premerger Notification Office (PNO) is responding in real-time by posting monthly figures for Hart-Scott-Rodino (HSR) Act filings. Starting today, the PNO is posting monthly totals for the most recent six-month period, and will update the numbers on a six-month rolling basis on the PNO homepage. While the Commission publicly reports monthly HSR transaction numbers in its
As we head into the second half of 2020, it’s a good time to pause and take stock of the past six months of work in the Bureau of Competition.
I am pleased to announce the appointment of a new manager in the Bureau of Competition: Patty McDermott has joined the Anticompetitive Practices Division as Deputy Assistant Director. Patty has served in the FTC’s Health Care Division since 2014, and received the Commission’s Louis D. Brandeis Award in 2018 for leading the trial team in FTC v. AbbVie. Before joining the FTC, Patty worked in private practice and clerked for the Honorable Cameron McGowan Currie in the U.S.
Over the past few years, the Bureau has faced a surprising number of failing firm claims by merging parties. Even when the economy was booming, we heard many iterations of the same argument: The acquired firm is failing. The acquiring firm is failing. Both firms are failing (which presumably would justify the merger on the basis that if you tie two sinking rocks together, they’re more likely to float). The entire industry is failing.
The PNO handles Hart-Scott-Rodino (HSR) premerger notification filings for thousands of transactions each year. Filing fees are also required as part of the HSR premerger notification process. Failure to pay the required fee on time will delay the HSR waiting period, but careful planning for the fee submission can help avoid most fee-related problems. The reminders and tips in this blog will help ensure that the PNO receives and processes the HSR fee as promptly as possible.
I want to thank Mike Moiseyev for his dedication and commitment to the Bureau of Competition. Mike has led the Mergers I Division for the past 16-and-a-half years, becoming Assistant Director in 2003. Mike joined the Bureau of Competition in 1989, following law school. He has managed some of the most significant cases in the Bureau during his career.
I want to thank Kevin Hahm for his work in the Bureau of Competition and, most importantly, for his contribution to our competition enforcement. Kevin, most recently, the Assistant Director for the Mergers IV Division, has been an integral part of the reinvigoration of the hospital merger enforcement efforts within the Bureau. Before becoming Assistant Director, Kevin had served as Deputy Assistant Director of the Mergers IV Division.
As we navigate uncharted waters in our work and home lives in response to the COVID-19 pandemic, a few changes have happened quickly. We claimed “home office” space to take on the challenges of working remotely. Bureau of Competition staff shifted from in-person meetings to conference calls, made from unlikely venues (such as couches) without all the usual professional trappings (sweatpants optional, children entirely possible).
On Friday, March 13, as part of the Bureau’s response to the COVID-19 coronavirus situation, and in partnership with the Antitrust Division of DOJ, we announced that the Bureau’s Premerger Notification Office would adopt a
Like many other agencies, organizations, and employers across the country, we in the Bureau of Competition are adjusting to the realities of working during the COVID-19 coronavirus crisis. As part of that adjustment, we are taking a variety of measures to respond to these new and challenging circumstances. Our two main priorities will continue to be: first, the health and well-being of our personnel, their families, and parties and organizations who appear before us; and, second, the continuity of our mission to protect competition and consumers.
When Congress passed the Hart-Scott-Rodino Antitrust Improvements Act of 1976, it created minimum dollar thresholds to limit the burden of premerger reporting. In 2000, it amended the HSR statute to require the annual adjustment of these thresholds based on the change in gross national product. As a result, reportability under the Act changes from year to year as the statutory thresholds adjust. The PNO fields many questions about the upcoming adjustments to the HSR thresholds from parties whose transactions may take place around the time of the revisions.
I am pleased to announce several management changes in the Bureau of Competition. While Michael Moiseyev is on detail, Dan Zach is serving as Acting Assistant Director for the Mergers I Division. Dan has served as Deputy Assistant Director of Mergers I since 2012, and he recently was lead counsel in the Commission’s successful challenge to the consummated merger between Otto Bock and Freedom Innovations.
More and more, merging parties argue that their merger does not raise competition concerns because they are not each other’s closest competitors. Parties have advanced this argument even in markets where there will be only two or three remaining firms post-transaction, including the merged firm. This argument is not new, and it often misunderstands merger analysis.
The Commission and Department of Justice’s recent case against Canon Inc. and Toshiba Corporation for violating the Hart-Scott-Rodino Antitrust Improvements Act makes an important point: restructuring a deal to avoid or delay an HSR filing may subject the merging companies to substantial penalties if the restructured transaction still results in an acquisition by the A side.
Parties regularly present their arguments and defenses of conduct and mergers to the Front Office of the Bureau if staff has recommended a challenge. A surprising number of these presentations begin with a recap of “how we got here” that includes various complaints about the investigating staff. Common complaints have included: the investigation is taking too long; staff didn’t present their concerns early enough in the investigation; and market definitions or areas of concern have evolved during the investigation. To be blunt, complaining about the staff is not a good defense.
For the good of the antitrust bar and our entire profession, the BC Front Office encourages parties to give associates, counsel, and newer partners more opportunities to present to the Bureau and the Commission in party meetings. In return, we promise reasonable expectations based on attorneys’ level of experience.
The Bureau of Competition is pleased to announce the conversion of the Technology Task Force into a permanent division in the Bureau of Competition. Effective October 1, 2019, it has become the Technology Enforcement Division.
In The Wizard of Oz, Dorothy was told to ignore the man behind the curtain. Some may argue that the same guidance applies to ancillary parts of a merger or joint venture agreement. These can include non-solicitation and non-compete provisions. Even when such provisions are ancillary to an otherwise legitimate business transaction, we will still make a determination that the restraints do not independently violate the antitrust laws by being overly broad.
The FTC’s Bureau of Economics is updating its guidance regarding the best practices for submitting data and economic analysis related to antitrust investigations. BE routinely engages in econometric analysis of data obtained from the parties, third parties, and independent data vendors. Similarly, consultants retained by the parties often submit their own quantitative analyses.