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The Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice have submitted to Congress progress reports on their efforts to streamline the pre-merger notification process and reduce the burdens of second request compliance. The reports are required by December 2000 amendments to the Hart-Scott-Rodino Antitrust Improvements Act. Among other things, the HSR amendments sought to address the substantial burdens imposed on merging parties by second requests issued by the antitrust agencies. Second requests have often extended merger investigations for months and generally require very extensive document and data submissions. The amendments require the antitrust agencies to conduct internal reviews and implement reforms to the second request process in order to eliminate unnecessary burdens, remove costly duplication and eliminate undue delay. Both reports conclude that the current merger review process works reasonably well, while acknowledging room for improvement. Pursuant to the amendments, the FTC and DOJ have modified their internal appeals processes for disputes over second request modifications or compliance. Under the revised process, appeals will be heard by the FTC’s General Counsel or a DOJ Deputy Assistant Attorney General with no involvement with the merger investigation. Both agencies have formally adopted the already prevailing practice of informing merging parties of their right to discuss possible modifications with the agency’s staff and to participate in a conference to discuss the request, at which the staff is required to describe the competitive issues it believes to be raised by the proposed transaction. Each agency will deploy systematic status-checks on second request modification negotiations 20 days after issuance. Moreover, the agencies plan to modify the model second request to facilitate negotiation of limitations on electronic discovery by requiring that negotiations involve representatives of the companies most knowledgeable about their electronic information systems. It has been left for the FTC’s new leadership to address concerns about the practice of requiring extensive production of econometric data and maps for geographic analysis. The DOJ has instructed staffs to be more sensitive to other concerns frequently advanced by the business community and bar such as reducing the number of facilities and employee files to be searched and the number of foreign language documents to be translated, although no specific reforms are adopted. The FTC report does not address these concerns. It remains to be seen whether the new leadership at the FTC and DOJ will accord second request reform a high priority and whether second request appeals will become a realistic option for merging parties. Michael H. Byowitz is a partner in the law firm of Wachtell, Lipton, Rosen & Katz. David A. Schwartz is an associate at the firm.

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