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There are a few basic considerations that businesses should bear closely in mind when responding to government antitrust investigations. Some businesses, such as those engaged in aggressive acquisition campaigns, will appear before these agencies on a regular basis; others may be surprised by a visit from a state or federal antitrust agency. In some cases, the company is the target of the inquiry, in others it may be attempting to influence the government’s investigation of others in the marketplace. Whatever the circumstance might be, the following guidelines should always be followed in responding to a government inquiry. Whether you are in-house counsel fashioning the approach of your outside attorneys, or lead counsel on the matter, these simple guidelines should be your roadmap. CREDIBILITY COUNTS Try as they might to remain unbiased and fair, antitrust enforcement officials are human, and are required in their work to draw inferences from all of the circumstances before them. Whether they will be comfortable drawing inferences in your favor may well determine the outcome of your case. Consequently, the most important rule to follow is this: Make your presentation credible. Where possible, produce the concrete support for your positions. Always avoid the casual overstatements and grandiose assertions (e.g., “entry is easy”) that can quickly melt under the inevitable stringent testing by agency staff. Once that happens, agency officials tend to be skeptical of everything else they hear. Conversely, when your assertions and representations consistently hold up, you gain tremendous credibility and are taken very seriously. BE FOCUSED AND TARGETED Prepare your case from day one as if you were preparing for trial. Forget the blunderbuss approach — it never works. Develop your strong themes as early as possible and hammer on them. For example, if you know a proposed merger will create high concentration levels, but there are several credible potential entrants, make potential competition and entry central themes of your presentation. Stay very specific in documenting your factual assertions. A highly individualized affidavit from a large customer who believes the merger will result in cost-cutting efficiencies that will be passed on is worth dozens of attorney-drafted form letters expressing generalized support for the transaction, especially if they start falling apart on cross-examination. ASK QUESTIONS AND LISTEN Any appearance before an agency should be viewed as a dialogue. Find out what is bothering different members of the staff early on, so that you can appeal to them as individuals. Offer to help the staff by asking what issues they would like to develop more fully, and through their answers you may learn critical facts about the real focal points of the investigation. Also, it is important to recognize that the focus may differ, sometimes quite dramatically, among the various individuals you are engaged with at the agency. Recognize that intense jockeying and positioning may be occurring among the staff during an investigation. Listening carefully to each staff member in a meeting can provide critical clues as to what is happening behind the scenes. ALWAYS BE RESPECTFUL AND PROFESSIONAL An agency investigation must never be confused with litigation, even though private sector litigators generally handle antitrust inquiries. In litigation, the process is adversarial from the outset, and a lack of civility easily can develop among the attorneys for both sides. This contrarian tendency is probably ineffective in litigation, but it is definitely counterproductive in presenting your cause to an investigating agency. Once the staff attorneys come to view your presentation as antagonistic or disrespectful, they are fully justified in regarding your cause with suspicion and opposition. Many cases are won or lost at the staff level. By the time the parties meet with the Assistant Attorney General or the Chairman of the FTC, it may be too late to reverse an aggressive staff recommendation. It is therefore critical that every effort be made to maintain a productive and mutually respectful rapport with the staff, as well as the more senior officials you may work with as the investigation progresses. And remember, you may well wind-up before the same staff attorneys and economists in your next deal, so always take the long view. Following these four key guidelines will help ensure that your agency presentations are effective and lead to positive outcomes. Tom Horton is a partner resident in the Washington, D.C., office of Orrick, Herrington & Sutcliffe, www.orrick.com. Mr. Horton has represented clients before the FTC and the Department of Justice on numerous matters, and has also served as a trial attorney in both of these agencies. He can be reached at 202-339-8456, or by e-mail at [email protected].

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