Fair Play: Justice Dept. Pledges to Slash Review Lengths


FAIR PLAY

Antitrust deciphered.

Makan Delrahim

A senior Justice Department official last week made an old regulator’s promise – investigators will increase the speed and reduce the burden of merger reviews.

Past enforcers have vowed to do the same but usually fallen short. Trimming document requests or speeding economic analysis is harder than it looks. Meanwhile, the time and intensity of merger investigations have ballooned, handicapping dealmaking and racking up legal fees. Heavyweight reviews took an average of one year to complete in 2016, up from about seven months in 2011.

The new twist is how the antitrust division plans to pull off these shorter merger reviews.

Top antitrust cop Makan Delrahim declared the Justice Department will pull back on asking merging companies to make promises of good behavior and instead demand structural fixes to anticompetitive transactions. Addressing a room full of attorneys in Washington, all of whom were waiting for the slightest hint about when, or if, the DOJ will file its lawsuit to stop the pending AT&T Inc. and Time Warner Inc. merger, Delrahim made clear his disdain for so-called behavioral remedies, deeming them ineffective and tough to police.

The division will now primarily request that companies sell off assets, instead of making corporate commitments to the government, as a condition for merger approval. The announcement dropped like a bomb in the antitrust community, with some attorneys predicting the death of behavioral remedies, until now the go-to solution.

Reviews will theoretically go faster once there are fewer options for companies seeking regulatory approval, a DOJ official said. Negotiating consent decrees takes time, therefore, “narrowing the universe of remedies likely to be on the table should also help shorten decree negotiations,” said Deputy Assistant Attorney General Don Kempf following Delrahim’s remarks.

Taking behavioral fixes off the table isn’t the only way the division wants to accelerate reviews. Kempf also called on companies to do more work on the front end of merger conversations. He said companies should flag competitive issues from the get-go and identify information the division needs to make its enforcement decisions. If companies cooperate with investigators by pointing to the competition problems up front, regulators can tailor document requests and everything goes faster.

That’s the logic, anyway. What’s known now is that merging parties and antitrust lawyers are on alert that regulators aren’t interested in work-arounds to problematic tie-ups.

Quote of the Week

“Antitrust is law enforcement, not regulation,” said Makan Delrahim, assistant attorney general.

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