The New FTC: Lina Khan Already Angering Antitrust Defense Lawyers with Tough Merger Posture

Firms no longer get a free pass to merge.

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One test of whether new Federal Trade Commission Chair Lina Khan is being effective is whether antitrust defense attorneys - who are used to the antitrust agencies acting like deal-makers instead of cops - are beginning to whine about her new policies. And that’s what’s happening.

When a firm of a certain size seeks to merge, it has to file a Hart-Scott-Rodino (HSR) form with the FTC. Then antitrust enforcers choose to either let the parties merge, or do a deeper investigation, known as a ‘second request,’ on whether the merger is harmful. For decades, nearly every merger has gotten through without a second request; not only that, but the FTC aggressively sought to accelerate the timeline mergers could happen. Here’s how bad it was.

Acting Chair Becca Slaughter got rid of early terminations. Now, according to the Capitol Forum, Khan is pushing for more in-depth investigations.

The FTC, just before the initial reviews expired on two transactions, told the companies involved that they would receive second requests.

That means firms will have to answer a lot of questions about why they are merging, their goals, and their financial projections. It doesn’t mean the FTC will challenge the mergers, but it does mean that getting mergers through in general is going to be a pain. And the defense bar knows it.

The uptick of second requests has angered attorneys who defend deals, sources said. The attorneys have complained that their clients have been caught off guard by the second requests, which usually require the merging companies to embark upon massive information-gathering efforts.

Boo hoo.