The average duration of a significant investigation that concluded with a complaint in the first half of 2022 was 11.9 months, while the average duration of a significant investigation that concluded in a consent was 10 months. This data unexpectedly indicates that the FTC may be speeding up significant investigations resulting in a consent agreement.
The longer average duration of matters that result in a complaint is notable given April 2022 statements from the DOJ Principal Deputy Assistant Attorney General that DOJ may seek “faster access to courts” in some cases, because “[t]here are some problems you can see from outer space” and DOJ does not have “to wait one or two years” for parties to comply with a second request before filing a complaint. Along those lines, the only merger challenge filed by DOJ in Q2 2022 concerned Booz Allen Hamilton’s proposed acquisition of Everwatch, which was only publicly announced 3.5 months earlier.
There are reasons, however, not to draw too many inferences from Booz Allen Hamilton/Everwatch, which was the only significant investigation concluded by DOJ in Q2 2022. Most notably, the complaint in that matter alleges a time-sensitive violation of the Section 1 of the Sherman Act, which is not common in merger challenges. In addition, public filings indicate that this deal was notified several months before it was publicly announced, likely based on a letter of intent. As a result, we would caution against inferring that DOJ is proceeding more quickly in most cases based on this distinct outlier. Indeed, this transaction is the only transaction notified between June 2021 and June 2022 that has been the subject of a significant investigation concluded by DOJ as of the end of Q2 2022.
DOJ then filed its complaint alleging short-term harms to a competitive-bid process before the parties substantially complied with their second requests. Similarly, in Cargotec/Konecranes, DOJ only informed the parties it would file a complaint to block the transaction after the parties delayed complying with their second requests for more than 18 months after their deal was announced. For that deal, the DOJ Principal Deputy Assistant Attorney General said: “[W]hat we saw with our staff was that the protracted posture of the merger review was already having an effect on incentives to compete that was creating uncertainty in the market." The same logic presumably applied to DOJ’s view of the four pull-and-refiles in Booz Allen Hamilton/Everwatch. In other words, where DOJ perceives that parties are using stall tactics to slow down its review, it may be more likely to proceed to court with a complaint.