Federal Trade Commission Revamps Premerger Investigation Procedures

The Federal Trade Commission's (FTC) Bureau of Competition (Bureau) recently announced changes to its premerger investigation procedures. These "Guidelines for Merger Investigations" (Guidelines), see http://www.ftc.gov/os/2002/12/bcguidelines021211.htm, are intended to streamline antitrust review at the FTC by facilitating information exchanges between the FTC and the parties, and by reducing the burden of Second Request compliance. In some respects the Guidelines conform FTC practice to that of the Antitrust Division of the Department of Justice (DOJ), the agency that shares premerger investigation and enforcement authority with the FTC. The DOJ announced its own Merger Review Process Initiative in 2001, in which it encouraged merging parties and DOJ staff to be more forthcoming in their discussions of theories and evidence in order to narrow the scope of Second Requests and the burdens on the merging parties and the government.

Some of the FTC's new Guidelines reduce or eliminate onerous requirements. Others provide expanded access to materials in the FTC's hands. Still others offer easier means to produce documents called for by Second Requests. The Guidelines are expected to evolve further over time in light of agency experience and additional public comment.

Guidelines Announced For Future Investigations

Key aspects of the Guidelines are summarized below:

Document Organization. Documents responsive to a Second Request can be produced as kept in the ordinary course of business, rather than sorted or identified by specific request.

Privileged Documents. The Bureau will not treat inadvertent production of privileged materials as an automatic waiver of the attorney-client privilege or work product protection. The standard procedure will be to return the original and all copies of any inadvertent production. Additionally, the amount of information required on privilege logs will be reduced.

Second Sweeps. Parties are encouraged to negotiate with the staff to avoid "second sweeps," or repeated document searches of the same offices. The FTC contemplates that parties responding to Second Requests will typically avoid second sweeps by agreeing to rolling document productions, reducing burdens on both sides. This Guidelines publicly endorses FTC staff practice in seeking rolling productions in exchange for eliminating second sweep requirements. Where a second sweep is necessary, the scope of search will be limited.

Administrative Appeal...