Tick-Tock: Debating Antitrust Timing Agreements

Tick-Tock: Debating Antitrust Timing Agreements Photo: Sun Ladder, via Wikimedia Commons

During a panel discussion about antitrust enforcement trends, a corporate attorney and a government lawyer agreed on most key points. But when it came to companies reaching timing agreements with the government, they went to opposite corners and came out swinging.

“I’m a big opponent of timing agreements,” said Harry Robins, a partner in the antitrust practice of Morgan, Lewis & Bockius in New York, during the Tuesday event. The agreements delay the proposed merger and grant the government extra time to investigate a deal. “It’s an example of very smart and able government lawyers trying to stretch the limits of what the law intended,” Robins added.

But Alexis Gilman, deputy assistant director
at the U.S. Federal Trade Commission’s Bureau of Competition, argued that a timing agreement can make a merger process more efficient. He explained it’s not uncommon for parties to drop millions of documents on the government toward the end of the process, giving investigators only 30 days under the law to assess them. A typical timing agreement extends that period another 30 days and can be renewed repeatedly.

“In terms of actually having the staff focus on the merits of the merger, a timing agreement does really enhance that by showing we are not trying to jam you, that we want to look at the information you present,” Gilman said.

But Robins claimed the government uses its “leverage” to intimidate companies into agreeing to more time. The government says “either enter a timing agreement, or we’ll stop looking at your merger and just prepare to litigate,” he said.

Gilman disagreed about which party had the “leverage.” But Robins was adamant. “There is no easy solution to a timing agreement,” he concluded. “We just have to live with it until we get more clients with enough backbone to be willing to challenge the government.”

The panel was part of a webinar, 2014 Antitrust Merger Enforcement Trends and Strategies, sponsored by the antitrust and corporate counsel committees of the American Bar Association’s Business Law Section.

Other issues discussed in the webinar included:

  • How important are customer opinions of a deal? Both Gilman and Robins said customer opinions matter, and the FTC uses them in almost every case it pursues. “The conventional wisdom is … happy customers typically mean no government case,” Robins said.
  • How significant are documents, particularly from third parties such as investment bankers? Both lawyers agreed that documents play a vital role in every major case, and that the most significant materials are “ordinary course-of-business documents” from the two merging companies that tend to discuss what the deal will, and won’t, accomplish. “When you are counseling clients, you want to find out what their ordinary course documents look like,” Robins advised.
  • How does the government treat complaints by former or current employees? “We definitely consider those views,” Gilman said. “We consider there might be axes to grind, but they know the business. We certainly mine former executives and employees for information.”
  • What role does politics play in antitrust enforcement, especially internationally? Both speakers favorably cited the May 22 speech by FTC chairwoman Edith Ramirez [PDF] at an antitrust conference in Beijing. Ramirez said consumers are best served when competition enforcement and policy decisions are “based on competition considerations, and not on other economic or social goals, however worthy.”
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