The Federal Trade Commission has made it easier and less expensive for some merging media companies and others to get together.
The commission says the changes are meant to "improve, rather than diminish" the FTC's ability to challenge anticompetitive deals and to reduce the "waste and inefficiencies" in the process that are paid for by "taxpayers, shareholders and consumers."
The commission, as of Friday, Feb. 17, has "streamlined" its merger review process to make it less burdensome on the staffs of both companies and the FTC to comply with "second requests" for information under Hart Scott Rodino (HSR) merger review.
Those requests result if the commission still has more questions about a merger after the initial 30-day waiting period under HSR. The FTC says that occurs in only about 5% of the mergers it is asked to review. But in those cases, the costs of producing the documents can run into the millions, says FTC, and extend the review time by as much as nine months.
The change is partly a result of the explosion in technology--"from the copy machine to e-mail"--that has increased the number of available documents a company must produce under current rules. That has put a strain on both the companies and the commission, the FTC said.
Last year, said the FTC, nine "second requests" generated more than a million pages apiece, compared to only two of that volume a few years back (it did not specify the year).
The reform essentially caps the number of staffers (35 under the new rules) whose files must be produced to comply with second requests, so long as certain baseline conditions are met. It also reduces the time frame from which information must be supplied and reduces the amount of information on "privileged" documents that must be automatically produced, though a full accounting of those documents must still be provided if the FTC decides it needs them.
“Over the past decade, the growth in the number of electronic documents and the greater use of economic tools to analyze mergers have increased the costs involved in second requests,” said FTC Chairman Deborah Platt Majoras . “The reforms that we are implementing today should improve the effectiveness and efficiency of the FTC’s review of mergers and reduce the burdens of the second request process, to the benefit of the parties and consumers.”