On January 19, 2018, the federal government failed to enact appropriations to fund federal operations, resulting in a government shutdown. Both the Department of Justice (DOJ) and Federal Trade Commission (FTC) have issued plans for how this shutdown will impact antitrust merger enforcement.
Key Takeaways
- Hart-Scott-Rodino (HSR) filings will be accepted by the agencies during the government shutdown.
- Early Termination of the HSR waiting period will not be granted during the shutdown.
- Due to its limited staff, the Premerger Notification Office of the FTC will not answer email or telephone inquiries regarding HSR rules or filing procedures.
- HSR waiting periods will continue to run during a government shutdown and DOJ and FTC staff will continue to review premerger filings and conduct investigations to determine whether to challenge reported transactions under the antitrust laws.
- Second Requests will continue to be issued.
- If engaged in merger litigation, FTC and DOJ attorneys will notify opposing parties and the courts of the government shutdown and attempt to negotiate timing extensions and suspensions. If such relief is not available, they will continue to litigate the matter.
- The FTC and DOJ websites will be available during a shutdown but will not be regularly updated.
Analysis
The DOJ and FTC have developed a shutdown plan in the event of a government shutdown. Each plan designates which employees are furloughed during a shutdown and which employees are excepted from the furlough requirement.
The DOJ and the FTC both issued contingency plans indicating that certain employees connected to antitrust enforcement within the Antitrust Division of the DOJ and the Bureau of Competition at the FTC will be excepted from the furlough and would continue to conduct antitrust enforcement activities.
During the government shutdown, the FTC and DOJ will accept HSR filings and certain staff from the Commission’s Premerger Notification Office will be excepted from furlough to accept filings and organize them for review; however, they will not issue early terminations of the HSR waiting period. HSR waiting periods will run their normal course during the shutdown, and both agencies will keep sufficient staff on hand to investigate mergers that could raise competitive issues. For litigated matters, both agencies have indicated that when possible, they will attempt to secure a continuance or otherwise request suspensions of dates for trials, hearings and filings, or similar relief to preserve the government’s claim. If such relief is not available, both agencies will continue to litigate the matter.
In the current DOJ Contingency Plan, of the 680 Antitrust Division employees, a total of 277 (41%) are excepted from furlough in the case of a government shutdown. In the current FTC Contingency Plan, of the 306 total Bureau of Competition employees, a total of 132 (43%) are excepted from the furlough. Moreover, within the Bureau of Economics, of the 105 employees, 10 (9%) are excepted from the furlough.
It is difficult to anticipate whether the FTC or DOJ would be more likely to request that merging parties refile their HSR forms (starting a new waiting period), or whether they would be more likely to issue a Second Request because of more limited staffing. It will likely depend on how long a shutdown lasts and how substantial the merger review workload is during a shutdown.
Links to the current DOJ and FTC Contingency Plans can be found here:
- DOJ: https://www.justice.gov/jmd/file/778206/download
- FTC: https://www.ftc.gov/system/files/attachments/office-executive-director/ftc_shutdown_plan_08-15-17.pdf
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