Key Takeaways

  • The U.S. Department of Justice is restoring a more targeted approach to merger reviews under the Hart-Scott-Rodino Act (HSR Act). The agency said the procedural change will reduce costs for businesses while enabling investigators to more quickly identify transactions that require further scrutiny.
  • The antitrust division announced on Thursday that it will streamline the "second request" merger investigation process—the situation in which the government requests more information about a deal that raises competition concerns.
  • "The Justice Department is working to eliminate bureaucratic burdens while maintaining the integrity of second request investigations, which are designed to protect American consumers and affordability," Acting Deputy Attorney General Stanley E. Woodward II said in a press release. He also noted that the change will facilitate faster and more efficient reviews of proposed transactions.

Deeper Dive

The Justice Department said the move is a return to historical practice, aimed at reducing administrative burdens while preserving its ability to thoroughly investigate transactions that raise competitive concerns.

The announcement marks the latest step by the Trump administration to reshape merger enforcement, with a focus on easing regulatory burdens for dealmakers.

"Unlike the more aggressive stance of the Biden administration, the current administration has ushered in a more deal-friendly era," global law firm Cooley noted in a February analysis. "Key differences include a commitment to regulatory speed for uncontroversial deals and a renewed willingness to consider structural remedies to address competitive concerns," the report said.

Under the HSR Act, the Justice Department or the Federal Trade Commission can issue a second request when it determines that additional information is needed to assess whether a proposed merger is likely to stifle competition. This process can take months and often requires companies to submit a large volume of documents.

The Justice Department said that historically, its antitrust division used targeted second request investigations to reduce administrative burdens and focus government resources on the specific aspects of a proposed transaction that raise competitive concerns.

Under the announcement released Thursday, in targeted investigations, the antitrust division and merging parties will enter into timing agreements that prioritize the submission of documents that address the division's questions, before achieving full compliance.

"Returning to historical practice is part of the antitrust division's commitment to reducing burdens and costs for merging parties, without weakening the division's ability to thoroughly investigate transactions that may raise potential competitive concerns," the Justice Department said, adding that it will continue to "require full compliance" in cases where broader information is needed to make enforcement decisions.