In a speech today at the Global Antitrust Enforcement Symposium, Department of Justice antitrust chief Makan Delrahim outlined plans to “modernize” the merger review process, making it shorter and more effective.
“There is widespread agreement that significant merger reviews are taking longer to complete.” he said during the event at Georgetown University. Delrahim vowed that his division will resolve “most investigations within six months of filing.” Also, the division will aim to render a decision within 60 days from when an application is deemed to be in compliance with DOJ guidelines.
Regulators flag a tiny percentage of proposed deals. Even so, in 2017, “significant” merger reviews by U.S. antitrust regulators took 10.8 months to resolve on average, up from 7.1 months in 2013, a 65% increase, according to law firm Dechert. While Delrahim took some responsibility for that, he titled his address in part, “It Takes Two.” Accordingly, he laid some blame at the feet of companies looking to merge, which he said often do not submit materials efficiently enough or overwhelm the government with data and exhibits in an effort to obscure key information. “Parties shouldn’t hide the eight ball!” he emphasized.
Delrahim assumed his current role in the fall of 2017, soon becoming a central and divisive figure in media and Washington regulatory circles for his aggressive efforts to block the acquisition of Time Warner by AT&T. His division continues to fight the $79.1 billion deal, with the D.C. Circuit Court of Appeals now reviewing the DOJ’s appeal of a federal decision in June green-lighting the merger.
Intrigue has swirled around Delrahim since his appointment by President Donald Trump, given Trump’s long-held grudge against CNN and tendency to weaponize branches of the U.S. government on a whim. Even so, no connection has ever been firmly established between Delrahim’s pursuit of the anti-merger lawsuit (an apparent contradiction with prior comments he made about it while a university professor) and Trump’s targeting of CNN. The federal judge hearing the DOJ lawsuit last spring took the White House connection off the table, barring defense lawyers from doing discovery or broaching it in open court.
Delrahim’s speech never addressed AT&T, but it described the struggle to review deals — in a department whose budget has not increased in nominal terms over the past 10 years — as a formidable one.
“Delay is a form of uncertainty and risk, and we should seek to remove it from the merger review
process whenever possible,” Delrahim said.
Among the measures the antitrust team is prepared to undertake, Delrahim said, is meeting with merging parties earlier in the process, providing more specific models and reviewing fewer documents from fewer “custodians.”
An effective antitrust operation should not be judged according to the number of times it moves to oppose or hinder a deal, he said. “Our job is not to bring the most enforcement actions,” he said. “Our job is to get the right result. More than that, our job is to get the right result in an efficient manner, which often means reaching consent agreements with parties to remedy fully the sources of anticompetitive harm. Only when that is not possible, should we litigate.”
The DOJ moved with some of the swiftness Delrahim described in his speech in the case of Disney’s pending acquisition of most of 21st Century Fox. After stipulating that Disney must re-sell the regional sports networks under the Fox tent, the DOJ gave its blessing to the $71.3 billion transaction. That nod came despite the fact that the massive deal “horizontally” combines film and TV assets in a way that alarms some industry observers. AT&T-Time Warner, on the other hand, is a “vertical” deal marrying content with distribution. Before its AT&T attack, the DOJ had not sought to block a vertical deal in more than 40 years.