The Federal Trade Commission (“FTC”) announced on February 4, 2021, that it is temporarily suspending the discretionary practice of granting “early termination” of the Hart-Scott-Rodino (“HSR”) Act waiting period, with support from the Antitrust Division of the U.S. Department of Justice (“DOJ”). The Agencies cited “the unprecedented volume of HSR filings” and “challenging transition period” as the reasons for suspending grants of early termination.

The HSR Act requires parties to certain mergers and acquisitions to notify the FTC and DOJ and observe a waiting period (usually 30 days) prior to consummating a reportable transaction. Filing parties are permitted to request early termination (“ET”) of the 30-day statutory waiting period. If either the buyer or the seller requests ET, the FTC and DOJ may, at their joint discretion, terminate this waiting period early. Requesting early termination does not guarantee that the request will be granted.

Commissioners Noah Phillips and Christine Wilson strongly criticized the policy, stating that they “see no rationale sufficient to justify suspending all grants of ET.” In the statement released with the announcement, Commissioners Phillips and Wilson also noted that “the Agencies have never suspended early termination because of leadership transitions or increased merger filings.”

The FTC’s announcement does not provide guidance on when ET grants might resume; rather it states that the Agencies anticipate that the suspension period will be “brief.” However, only one transaction has received early termination since January 15, 2021. This represents a longer ET hiatus than was put in place at the outset of the pandemic, when the agencies were transitioning to remote work and a revised electronic filing system.

How Covington Can Help

Our antitrust and mergers and acquisitions practice groups include attorneys, including several who served at the FTC or the DOJ, with decades of experience in advising on how HSR rules can affect transaction timing and deal risk. Our team can provide detailed and practical insight into how changing policies at the FTC and DOJ might apply to various types of transactions. If you have any questions concerning the material discussed in this client alert, please contact the authors.

Photo of James R. Dean Jr. James R. Dean Jr.

James Dean practices in the antitrust and energy regulatory areas and serves as vice-chair of the Antitrust Practice Group.  As part of his antitrust practice, Mr. Dean advises clients on all aspects of antitrust law, including mergers, joint ventures, distribution agreements, and trade…

James Dean practices in the antitrust and energy regulatory areas and serves as vice-chair of the Antitrust Practice Group.  As part of his antitrust practice, Mr. Dean advises clients on all aspects of antitrust law, including mergers, joint ventures, distribution agreements, and trade association activities.  He has represented numerous clients in responding to government investigations and as both plaintiffs and defendants in private antitrust litigation.  Mr. Dean also regularly handles issues related to pre-merger notification filings under the Hart-Scott-Rodino Act and foreign merger control regimes.

Mr. Dean also has significant experience with energy regulatory matters.  He advises both regulated utilities and financial investors on the federal and state regulation of both natural gas and electricity, including market restructuring issues, obtaining regulatory approval for energy-related transactions, and rate filings.

Photo of Ross Demain Ross Demain

Ross Demain advises clients in complex antitrust matters, including government investigations; mergers and acquisitions, joint ventures, and other transactions; litigation; compliance; and trade association activities.

He has represented clients in civil and criminal investigations before the Department of Justice, Federal Trade Commission, and…

Ross Demain advises clients in complex antitrust matters, including government investigations; mergers and acquisitions, joint ventures, and other transactions; litigation; compliance; and trade association activities.

He has represented clients in civil and criminal investigations before the Department of Justice, Federal Trade Commission, and state antitrust enforcers, and as both plaintiffs and defendants in private antitrust litigation. Mr. Demain also regularly helps clients assess and comply with their obligations under the HSR Act.

Mr. Demain has significant experience helping clients achieve positive outcomes across a variety of industries and sectors, including technology, electronics, cable, broadcast, industrial products, energy and natural resources, defense, pharmaceuticals, medical devices, sports, and financial services.

Recent litigation victories in which Mr. Demain has been involved include obtaining dismissal of an antitrust claim in a precedent-setting case at the International Trade Commission that confirmed that the antitrust injury requirement applies to claims brought under Section 337 (ITC 2018); achieving one of the first dismissals of a corporate defendant on jurisdictional grounds in the sprawling In re Automotive Parts Antitrust Litigation, 2013 U.S. Dist. LEXIS 80337 (E.D. Mich. 2013); attaining dismissal of a purported class action antitrust suit brought by retired NFL players alleging a conspiracy to restrain a market for the sale of their images and likenesses, Washington v. National Football League, 2012 U.S. Dist. LEXIS 89401 (D. Minn. 2012); and obtaining an early dismissal of novel resale price maintenance claims brought in federal court under New York’s Donnelly Act. Worldhomecenter.com, Inc. v. KWC America, Inc., 2011 U.S. Dist. LEXIS 104496 (S.D.N.Y. 2011).

Photo of Jim O’Connell Jim O’Connell

Jim O’Connell advises clients on their critical antitrust matters, including mergers and acquisitions, joint ventures, and other transactions; licensing arrangements and other business practices; government investigations; and litigation. In connection with his merger practice, he also regularly helps clients assess and comply with…

Jim O’Connell advises clients on their critical antitrust matters, including mergers and acquisitions, joint ventures, and other transactions; licensing arrangements and other business practices; government investigations; and litigation. In connection with his merger practice, he also regularly helps clients assess and comply with their obligations under the HSR Act and comparable merger control regimes around the world.

Clients and peers recommend Jim for his knowledge of antitrust law and his ability to provide expert and practical guidance. He is also recommended for his detailed understanding of the people and processes of the U.S. antitrust enforcement agencies, which he applies to help his clients navigate their most critical antitrust challenges successfully and efficiently. Legal 500 has described him as a “well-respected” practitioner who is “well connected with the DOJ” and recognized by clients for his ability to “quickly develop a high level of company-specific expertise.”

Jim has represented clients in a broad range of industries and sectors, including leading companies in the e-commerce, pharmaceutical, medical device, financial services, telecommunications, electronics, cable, broadcast, alcoholic beverages, consumer products, industrial products and heavy manufacturing, energy and natural resources, steel, aerospace, defense, chemicals, gaming, and software industries.

Jim joined Covington after over five years of public service with the Antitrust Division of the U.S. Department of Justice, where he served in several leadership roles, including as Deputy Assistant Attorney General and Chief of Staff. As Deputy AAG, he had responsibility for the Division’s appellate program and for the development of its major legislative and policy positions, such as those regarding intellectual property and the enforcement of Section 2 of the Sherman Act. His duties also included managing the Division’s relations with its enforcement counterparts around the world. This extensive international enforcement experience enables him to provide his clients highly informed and practical assessments of their U.S. and non-U.S. antitrust risks. Prior to his government service, Jim practiced antitrust law at an international New York-based firm.

A frequent speaker and writer on antitrust law and policy issues, Jim has also been a leader in the Antitrust Section of the American Bar Association for many years, serving in such positions as Chair of the editorial board of Antitrust, the Section’s magazine, and as Co-Chair of the Section’s Federal Civil Enforcement Section. He is currently a member of the Section’s leadership Council. He has also testified before the U.S. Congress and the Antitrust Modernization Commission, and he has served as a non-governmental advisor to the International Competition Network, which brings together competition enforcement authorities, academics, and leading practitioners from around the world to foster the development of best practices and encourage convergence on matters of antitrust policy.