The US antitrust authorities will cease certain of their operations during the pending government shutdown and your transaction may be affected.
The US antitrust agencies receive an average of 25 Hart-Scott-Rodino (HSR) filings per week. During the current government shutdown, the Federal Trade Commission (“FTC”) and Antitrust Division of the Department of Justice (“Antitrust Division”) have indicated they will continue to accept HSR filings, and the FTC’s Premerger Notification Office will be open but with a very limited staff. We see three consequences that transacting parties should take into consideration:
First, given the limited staff likely to be on hand during the government shutdown, grants of early termination of the initial waiting period appear unlikely. Thus, if transactions are not investigated, as described below, they will be cleared simply by expiration of the initial waiting period after 30 days.
Second, the FTC has stated that for transactions (i) that present antitrust concerns and (ii) where failure by the US antitrust authorities to act before expiration of the initial waiting period is likely to result in “a substantial impairment of the government’s ability to secure effective relief at a later time”, the US antitrust authorities will “continue HSR investigations during the pendency of a shutdown.” Practically speaking, this means that if the US antitrust authorities identify your transaction as one that presents antitrust concerns, it is likely that the government will either request of the parties to the transaction an extension or issue a Second Request as a tolling measure rather than allowing the transaction to consummate unchecked.
Nonetheless, staff furloughs at the FTC Premerger Office and elsewhere within the antitrust agencies during the government shutdown may mean that certain transactions that might otherwise have been investigated may end up not being examined in the first instance. This may be especially relevant to transactions where the antitrust issue is not readily apparent. Companies should be cognizant of the fact that failure by the FTC or Antitrust Division to investigate a transaction within the statutory waiting period does not prevent those authorities from challenging the transaction down the road. Indeed, Bill Baer, the Head of the Antitrust Division, recently re-emphasized the agency’s willingness to investigate consummated transactions that appear to violate the antitrust laws.
Third, while the FTC Premerger Office is open to accept HSR filings, the website of the FTC has been taken down (at least for the time being). Practitioners will not have access to the electronic guidance usually available on this website (e.g., published informal interpretations of the HSR rules and regulations, FTC opinions and consent orders, etc.). It is also likely that the Premerger Office will not respond to emails or calls requesting interpretation of the HSR law that impact the preparation of HSR filings, or will respond very slowly.