On September 20 2012 the Federal Trade Commission (FTC) announced final changes to its internal Rules of Practice regarding Part 2 (non-adjudicative) investigations and attorney conduct. The new rules are intended to streamline investigations and keep up with advances in e-discovery. Although clients are unlikely to notice any significant departure from the FTC's current practices, a few changes are noteworthy, if only because the FTC found a need to codify current practices into formal rules.
Of most interest is a new rule that expressly permits agency staff to disclose the existence of an investigation and the party names to certain third parties. This new rule merely formalises what has long been FTC policy and practice regarding confidentiality. The FTC generally recognises the importance of confidentiality to targets of antitrust investigations, and does not make broad public disclosure of non-public information. But in the course of interviewing third parties - including customers, competitors and potential witnesses - disclosure of the investigation and its targets is often viewed as necessary to further the investigation. Commenters to the notice of proposed rulemaking questioned the need to formalise a longstanding and uncontroversial, if not well-liked, practice. Whatever the FTC's motives, codification of this practice should be a reminder that companies subjected to an FTC investigation are well served to develop proactive strategies to position their interests in the best possible light to customers, suppliers, competitors and others.
Existing targets of FTC investigations should also take note of the new rule that relieves companies of the obligation to preserve documents if there has been no written communication from the FTC concerning the investigation for one year. In the past, companies were justifiably reluctant to enquire about the status of a seemingly dormant investigation to determine whether they must continue to preserve documents. As a result, document preservation policies were kept in place, sometimes for years, at a significant cost and burden to the company. With the adoption of the new rule, companies which have received a document preservation demand, access letter or FTC compulsory process, and which have not received any written communication from the FTC for one year, need not risk kicking the hornet's nest before discontinuing a costly document retention plan.
For further information on this topic please contact Joseph G Krauss, J Robert Robertson or Charles Dickinson at Hogan Lovells' Washington DC office by telephone (+1 202 637 5600), fax (+1 202 637 5910) or email (email@example.com, firstname.lastname@example.org or email@example.com).