FTC and DOJ Temporarily Suspend Early Termination of Hart-Scott-Rodino Waiting Periods
HSR Early Terminations Suspended — On February 4, the Federal Trade Commission (FTC) announced that it was temporarily suspending the grant of Early Terminations of the 30-day Waiting Period for mergers and acquisitions that require notification under the Hart Scott Rodino Act. This is virtually unprecedented. It is also controversial. The suspension prompted a dissenting statement from two sitting FTC commissioners. The HSR statutory Waiting Period is 30 days from the date the parties to a transaction submit HSR notification reports to the FTC and Department of Justice (DOJ). During the Waiting Period, the parties are legally barred from closing the transaction while the FTC and DOJ do a cursory antitrust review of the deal. The Waiting Period is terminated early for a large proportion of HSR filings — often in as little as 10 days — where it is obvious that no antitrust issues are raised. Parties in time-sensitive deals frequently rely on early termination in setting a timeline for closing. The FTC announced that it was suspending Early Terminations so that it could review the processes and procedures by which such terminations are granted. In making the announcement, the FTC referred to the transition to the new presidential administration and the “unprecedented volume of HSR filings” that it has received in the new fiscal year. The announcement gave no date for the resumption of Early Terminations, although the FTC said the suspension would be brief. The announcement appears to formalize a de facto suspension of Early Terminations that began in mid-January. The only other time in recent memory when Early Terminations were suspended occurred in March 2020, at the beginning of the Covid lockdown, when the FTC had to shift to an electronic filing platform to permit parties to make HSR filings electronically and to permit the FTC and DOJ Staff to review them remotely.