FTC Cautions Merger Parties To Protect Competitive Information

The Federal Trade Commission ("FTC") Bureau of Competition urged companies to protect competitively sensitive information through established protocols during pre-merger negotiation and the due diligence process.

The FTC warned that, in transactions involving a competitor or a potential competitor, companies must be wary of antitrust risks that can arise when parties share information as part of their due diligence and pre-consummation integration planning. The exchange of competitively sensitive information may limit or eliminate competition between the parties to a merger, acquisition or joint venture.

The FTC stated that the antitrust agencies have taken action against companies for unreasonable information sharing prior to or during the Hart-Scott-Rodino Act ("HSR") merger review period (and, separately, as a course of conduct between competing parties). Parties to a transaction may inadvertently violate the waiting period requirements of the HSR Act by