Antitrust regulators may be more inclined to request additional information in reviewing proposed mergers with staffing limited due to the federal government shutdown, attorneys said.
Under the Hart-Scott-Rodino Act, merging companies must notify the U.S. Department of Justice and Federal Trade Commission and observe a 30-day waiting period before closing. The agencies may file what is called a “second request” to further investigate mergers that raise antitrust concerns.
Despite depleted staffs, the DOJ and FTC will continue to review merger requests. However, they might lack the personnel to complete a full review, attorneys said. Robin Crauthers, McCarter partner and former DOJ antitrust attorney, spoke to the National Law Journal about the potential impact of the shutdown noting that deals will be evaluated during the shutdown, except for those that cause competitive concern. She added, “Deals that are on the line of whether or not there’s a competitive issue might get forced into a second request because there’s not enough staffing to conduct a preliminary investigation.”
Robin also noted that a government shutdown risks creating gaps in enforcement. Consumer reports will not be heard until funding returns and whistleblowers may be less likely to come forward with fewer staff available to field their complaints. Still, “it’s not an opportunity to change [company] compliance policies,” she said.