An enduring merger control trend is the authorities’ greater focus on parties’ internal documents, and the related risk of penalties and delays to reviews where parties fail to submit complete responses to RFIs or provide incomplete or misleading submissions. Again (like for jurisdictional creep and new theories of harm), there is a link to killer acquisition concerns as well as broader difficulties authorities face in predicting the future. How will this deal impact competition? Why is the acquirer paying such a high price? Is this start-up the “next big thing”? Authorities increasingly rely on parties’ internal documents for the answer.
A greater number of authorities are also investigating and imposing penalties on parties for “gun-jumping” (implementing a deal prior to obtaining the required notifications or approvals). And, more generally, there is increasing confidence amongst smaller or less prominent authorities in imposing sanctions for procedural infringements in merger cases.
Don’t fail to prepare: Key messages regarding potential document requests
- Start your planning early: If your deal is likely to attract scrutiny, consider early engagement with your IT team and early identification of relevant custodians, data sources and potential issues.
- Engage experienced e-discovery counsel early in the process of negotiating with authorities: The earlier the better to help address key issues such as document identification and culling, use of advanced technologies, sampling methodologies and production requirements. As well as reducing time and cost to complete the review, this also helps to build credibility with the authority when they assess the adequacy of the production.
- Proactively train employees on appropriate business communications: Documents containing ambiguous or exaggerated language can readily trigger an authority’s suspicions. Training employees on basic “do’s” and “don’ts” to avoid inappropriate language in the documents they create – even when a particular M&A deal is not in contemplation – helps mitigate this risk.
Also, discourage employees from routinely marking documents as privileged and confidential, or subject to non-disclosure agreements or export control restrictions. These broad designations are often wrong and clutter the expensive and time-consuming quality control process with documents that have no risk of disclosing protected or restricted information.
Latest antitrust and competition trends
Merger control and jurisdictional creep
An increasing challenge for M&A parties is identifying where their deals will be reviewed in a context where merger control authorities are finding new ways to take jurisdiction over transactions falling below traditional (usually turnover-based) notification thresholds
Merger control and new theories of harm
Linked to jurisdictional creep and killer acquisitions is the trend of competition authorities looking at new theories of harm when assessing transactions for substantive concerns, with much greater focus in particular on innovation competition, dynamic competition and vertical concerns.
Growth of foreign direct investment (FDI) and national security regimes
Many countries are continuing to introduce and strengthen their FDI and national security regimes, due to an evolving appreciation of what is a risk to national security and lines being blurred with economic stability.
Digitalization, Big Tech and copycat antitrust investigations
A noticeable global trend is more antitrust investigations into Big Tech, in particular for suspected infringements of rules that prohibit the abuse of a dominant position or monopolization, as well as privacy concerns.
Antitrust investigations and new areas of focus
As well as the recent focus on Big Tech, there are a number of other new areas of focus for antitrust authorities. See below to learn more about these.
More aggressive antitrust enforcement?
In the US, the Biden administration is synonymous with more aggressive enforcement in all areas of antitrust, emphasised by Lina Khan (FTC Chair) and Jonathan Kanter (DOJ Assistant Attorney General for the Antitrust Division).
The continuing rise of antitrust damages actions
The US and Canadian antitrust damages regimes are well-established and continue to thrive.
Antitrust damages actions and dominant firms
While damages claims are often thought of in the context of harm caused by cartels, there is an increasing trend of damages claims against dominant companies.