From: lessgovt@gmail.com   
      
   Antitrust Officials Pile On the Paperwork   
   By Williams & Hauser, July 4, 2023, WSJ   
      
   The Federal Trade Commission is trying to make it harder for companies to   
   merge by burying them in paperwork. The FTC’s proposed overhaul of a   
   critical part of the U.S. merger review process would increase the average   
   time to prepare a merger filing    
   from 37 hours to 144. According to the agency’s calculations, that’s   
   roughly $350 million in added costs for an estimated 7,100 filings a year,   
   which would be a boon for lawyers but a burden for businesses.   
      
   The one-size-fits-all proposal to add dozens of hours of paperwork per   
   deal—regardless of competitive concerns—is an overreach by the FTC and the   
   Justice Dept’s antitrust division that will disproportionately chill   
   investments at the lower end of    
   the reporting threshold. While some of the changes are reasonable adjustments   
   to address evolving business and transaction structures, subjecting thousands   
   of competitively neutral transactions to expanded reporting hurdles is hard to   
   justify when only a    
   slim minority of deals raise antitrust concerns.   
      
   Requiring a merging company to identify all communication systems or messaging   
   apps “that could be used to store or transmit info or documents related to   
   its business operations,” for instance, is premature at the filing stage.   
   While this info could    
   be relevant for a full-fledged antitrust merger investigation, it’s   
   difficult to see the relevance for a preliminary evaluation of competitive   
   issues.   
      
   Additionally, the requirement to provide all drafts of transaction-related   
   documents (e.g., management presentations) that were shared with officers,   
   directors or deal team supervisors could cover hundreds of documents, many of   
   which may be subject to    
   withholding or redaction for privilege.   
      
   The FTC and Justice say the changes will “improve the efficiency and   
   effectiveness” of the initial review period and “potentially narrow the   
   scope of any investigation or reduce the need to conduct a more in-depth   
   review of the transaction.” We    
   believe the changes will have little effect on the speed and outcome of the   
   initial review. And we should know—one of us has prepared hundreds of merger   
   filings across an array of industries, and the other has reviewed dozens of   
   mergers at both Justice    
   and the FTC.   
      
   To see why the proposed rule is misguided, it is important to understand the   
   premerger regime. Enacted in 1976, the Hart-Scott-Rodino Act establishes a   
   process for the FTC and Justice Dept to review and challenge deals before they   
   are consummated by    
   imposing two types of waiting periods. The initial waiting period allows   
   agency staff to determine whether a transaction warrants further scrutiny.   
   During this time, agencies may open a preliminary investigation and request   
   more info for review. For most    
   deals, no further inquiry is necessary, and most transactions never reach that   
   stage.   
      
   The agencies may extend the initial waiting period by issuing a “Second   
   Request.” This process requires companies to produce extensive tranches of   
   documents and data and make executives and employees available for depositions   
   or investigational    
   hearings. A Second Request can take six months or longer to complete and   
   routinely costs millions of dollars in legal fees.   
      
   Tripling the amount of time required to prepare a premerger filing makes   
   little sense when less than 2% of reported deals received a Second Request in   
   2021.   
      
   The agencies argue that the proposed changes are justified because they bring   
   U.S. merger review more in line with that of other jurisdictions, such as the   
   European Union. It is true that the EU and other jurisdictions require info   
   that isn’t in the    
   current HSR Form. But unlike the U.S., many jurisdictions have streamlined   
   proceedings for transactions that clearly don’t present competitive issues.   
      
   To be sure, several elements of the proposed HSR changes—such as providing   
   an explanation of the deal rationale—are reasonable.   
      
   But a glaring issue with the proposed rule is that some of the info requests   
   are subjective and could provide undue leverage to reject filings in an effort   
   to restart the waiting period. Submissions could be rejected based on   
   reasonable differences over    
   the adequacy of responses, even if made in good faith.   
      
   Example: Companies must identify and provide sales, customer and other info   
   for current and planned products that compete or could compete with their   
   merger counterpart. It isn’t hard to envision cases in which companies and   
   regulators disagree over    
   the nature and scope of this actual and (to an even greater extent) potential   
   competition.   
      
   A blanket approach to reform is unwise, will add millions of dollars in costs,   
   and will deter economically and socially beneficial investments and   
   transactions. We urge individuals and businesses to weigh in on this   
   potentially burdensome proposal before    
   the close of the public comment period on Aug. 28.   
      
   Mr. Williams is a partner at Perkins Coie. He advises clients on antitrust   
   merger control matters, including premerger notification requirements and   
   merger investigations before the Justice Dept and the FTC. Mr. Hauser is   
   counsel at Perkins Coie. He has    
   served as an antitrust attorney at the Justice Dept and the FTC.   
      
   https://www.wsj.com/articles/antitrust-officials-pile-on-the-pap   
   rwork-ftc-justice-competitiveness-filing-440f2a76   
      
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