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The Federal Trade Commission and Department of Justice, which already are frustrating companies and their legal teams by taking the toughest stand against mergers since the 1970s, now are planning changes that could add months to premerger notification reviews.
The agencies said Tuesday that they are proposing the biggest changes in the Hart-Scott-Rodino merger-filing process since 1978. That process requires premerger notification for deals above $111.4 million.
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Previously, a 30-day waiting period sufficed for the government to review proposed transactions to determine if they required further investigation. But under the proposed changes, companies would have to provide extensive additional information, such as acquisitions over the prior 10 years, management and board details, supplier relationships, and projected revenue streams.
It's a big change, Jennifer Rie, who practiced antitrust law for 10 years before joining Bloomberg Intelligence as an analyst, told Bloomberg Law.
"We're looking at changing something from a 10-day process to a two- to three-month process," Rie said.
Some of the changes are aimed at addressing concerns in Congress that foreign governments, such as China, "can distort the competitive process or otherwise change the business strategies of a subsidized firm in ways that undermine competition following an acquisition," the FTC said.
The FTC-DOJ proposal will be published in the Federal Register this week, triggering the start of a 60-day window for public comment.
Tuesday's announcement was the latest in a string of moves by the FTC and DOJ to raise the hurdles on mergers, especially in the fast-consolidating technology industry.
Legal observers say that after the Biden administration came into office in 2021, the agencies started sometimes objecting to mergers because of the potential for price increases long term, even if there was no evidence prices would increase in the short term.
Last year, the FTC brought at least 20 antitrust cases. The most notable was its lawsuit seeking to block Microsoft's $69 billion acquisition of video-game maker Activision.
In that case, which is pending, the government argues Microsoft would be able to suppress competitors to its Xbox gaming consoles by not offering versions of Activision games compatible with competitors' devices.
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