On October 20, 2020, TransPerfect Legal Solutions (TLS) hosted an inaugural conference on recent developments in antitrust clearance and merger enforcement proceedings. This article is the first of a three-part series highlighting the major takeaways from each session of the conference. 

The opening panel of the conference was titled Merger Clearance Beyond November Third: Potential Impacts of the Election on Merger Review and Enforcement.

The overarching mission of the panel was to explore how the election’s outcome may impact the M&A regulatory environment. This included how changing political dynamics could affect Big Tech regulations, regulatory approaches to remedies, and the gaps between campaign promises and the realities of merger clearance proceedings.

This session featured three panelists, two of whom are partners at leading antitrust practices in the country: Andy Lacy from Simpson Thacher and Jon Gowdy from Morrison Foerster. The other panelist was Kellie Kemp, competition counsel from Uber, who brought the experience and vantage point of in-house counsel to the panel.

The panel did not disappoint, providing the following key takeaways.

A Call for Continued Empathy

All three panelists noted that in today’s Big Data era, the burden of compliance with a HSR second request has reached unprecedented proportions.

Not only do businesses generate a greater volume of documents than ever before, they also generate a greater variety of data types, which further complicates the process.

Corporate IT environments used to be composed primarily of file servers and email accounts. Today, text messages, cloud repositories (Box, Dropbox, etc.), collaboration platforms (e.g., Slack, GDrive) and instant messaging applications have compounded the burden of performing electronic discovery (ediscovery) in a second request.

Fortunately, in recent years, the Antitrust Division of the Department of Justice has reformed the merger review process with a stated purpose of reducing the burden on merging parties. This has helped build faith that the merger review regulations are designed to be a fair and reasonable safeguard for competition.

The hope was palpable that regardless of the makeup of the next Administration, empathy would continue to drive the review process.

Targeting “Killer Acquisitions”

The panelists also discussed the recent trend of the DOJ’s Antitrust Division and the FTC Bureau of Competition focusing less on direct, head-to-head competition, but rather on nascent competitors and vertical acquisitions that may adversely impact innovation.

Taking a network view of competition in a broader, dynamic marketplace has defined recent regulatory developments (as seen through the latest discussions on the Hill regarding Big Tech in an antitrust context).

The consensus was clear that while Democrats and Republicans might support this focus with different rationale and agenda, the focus will carry on either way.

Special Scrutiny for Private Equity Buyers

A third theme that emerged from the panel was that not all buyers are the same in the eyes of the regulators.

For institutional investment funds, even prior conduct on unrelated transactions in different industries can adversely impact the perception of how they will behave and whether they will abide by principles of competition, post-transaction.

In turn, this class of buyers are more heavily scrutinized, even when they are not acting as a sponsor for a strategic acquirer. The result is a fact-intensive analysis that can span several years and multiple transactions.