The Antitrust Division of the DOJ has amended its 2001 Merger Review Process Initiative (“MRPI”) in an effort to streamline merger review without sacrifi cing the thoroughness or success of investigations. The MRPI amendments are the DOJ’s response to technology and trends in antitrust law that have increased the amount of material companies must produce and the DOJ must review in merger investigations and in response to “second requests” under the Hart-Scott-Rodino Antitrust Improvements Act (“HSR Act”). Electronic communication and data storage vastly increase the sources of potentially responsive documents that must be collected, reviewed and produced during an investigation. At the same time, courts and the reviewing agencies rely increasingly on data-rich analyses of transactions’ competitive effects instead of market share presumptions. A new “Process & Timing Agreement” provides (in most cases) additional ways for parties negotiating a second request to seek relief from document production burdens. In addition, the DOJ’s Model Second Request has been updated based on recent limitations and negotiations implemented by DOJ staff.
The Process & Timing Agreement is expected to be offered to parties as an option to reduce the scope of their response to a DOJ second request. In exchange for the more focused and streamlined investigation, parties will be required to provide the DOJ with early access to information and individuals who can help focus the data search. Under the model Process & Timing Agreement, the DOJ generally will allow each party to cap its search for responsive documents – both electronic and hard copy – at 30 individuals per party. The DOJ will condition this option on timing and procedural requirements that preserve its access to discovery if the transaction ultimately is challenged. The DOJ may also refrain from offering this option if the responsible Deputy Assistant Attorney General approves, especially in certain cases with particularly complex issues or numerous products or geographic markets.
As for the Model Second Request, the relevant time period for which the parties must provide documents and information has been reduced from three to two years from the date of issuance of the second request. The relevant time period for data submissions generally remains three calendar years. The “second sweep” usually required under a continuing second request will not be required unless the company complies with the second request more than 90 days after its issuance. Companies may now identify and preserve, rather than search, back up tapes and other inaccessible storage media. Companies also may now produce electronically stored documents in electronic form only, rather than producing both electronic and paper copies. The Model Second Request also reduces the scope of the privileged documents required to be identifi ed on a privilege log produced to DOJ investigators.
Readers may recall our reporting last year in these pages that the Federal Trade Commission issued “Reforms to the Merger Review Process” in a corresponding attempt to address the growing burden of compliance with second requests. See FTC Offers Additional Reforms to Merger Review Process, ANTITRUST UPDATE (Drinker Biddle) Spring 2006, at 13-14. The two U.S. antitrust agencies have now developed very similar approaches to establishing data needs and targeting their inquiries, and overall the HSR second request process should be considered much improved by these efforts. That will not be much comfort for parties to the very small number of very complicated investigations in which some or all of the reforms are limited or not available.