As the coronavirus disease 2019 (COVID-19) emergency played out this week, the US Department of Justice (DOJ) and Federal Trade Commission (FTC) issued important guidance on changes to merger review procedures, as well as ongoing antitrust investigations and litigation. They also announced their intent to vigorously enforce the antitrust laws in the market for public health products. This alert briefly summarizes these important developments.
FTC and DOJ are continuing to review premerger notification filings under the Hart-Scott-Rodino (HSR) Act, although with some procedural modifications. They have established a temporary e-filing system and announced a series of technical changes to the HSR filing requirements while temporary e-filing is in effect. In addition, after initially suspending grants of early termination of the HSR waiting period, the agencies announced that, as of March 30, they will resume processing early termination requests. The pace of this review, however, may be slower than under customary conditions.
The agencies are still open and operating, but there may be significant delays on matters requiring substantive investigation. Most staff at both agencies are working remotely. All meetings (including with the DOJ front office and/or the FTC bureau chiefs and the Commissioners themselves) are being conducted by phone. Additionally, DOJ announced that all Antitrust Division depositions will be postponed and will be rescheduled using secure videoconferencing capabilities.
Statutory deadlines like the running of HSR waiting periods cannot be extended by the agencies, but we can expect that both agencies likely will aggressively seek to extend deadlines by agreement with the private parties involved in merger and other investigations requiring substantive attention. For example, DOJ has announced that it is seeking an additional 30 days on all timing agreements. We also expect to see more parties resorting to pull-and-refile procedures before the issuance of a Second Request. In addition, Congress is considering several legislative alternatives to permit the extension of the initial waiting period in a number of ways.
Finally, the agencies have underscored that the substantive antitrust laws are not suspended just because of the COVID-19 outbreak. DOJ issued a warning this week that it intends to hold accountable anyone who violates the antitrust laws in connection with the manufacturing, distribution, or sale of public health products such as face masks, respirators and diagnostics. In particular, individuals or companies that fix prices or rig bids for personal health protection equipment such as sterile gloves and face masks, and competitors who agree to allocate among themselves consumers of public health products could face criminal prosecution. Similarly, FTC announced that it is reallocating resources across the Bureau of Competition to maintain continuity of its core enforcement operations.
DLA Piper’s Global Antitrust and Competition Group is working closely with a wide range of clients to navigate this complex and evolving legal environment. Stay tuned for further developments.
Please visit our Coronavirus Resource Center and subscribe to our mailing list to receive alerts, webinar invitations and other publications to help you navigate this challenging time.