FTC Warning: Don't Overshare In Pending Deals

The Federal Trade Commission (FTC) has recently re-emphasized the potential risks of antitrust violations stemming from the exchange of competitively sensitive information during pre-merger negotiations and due diligence. Although the FTC recognizes the legitimate need for sharing and accessing detailed information about a company for the purposes of an M&A transaction, they cautioned that the exchange of competitively sensitive information such as pricing information, strategic plans and costs has to follow appropriate procedural safeguards, and noted enforcement actions when the parties did not comply with them.

Background

It is well-established that exchanging information (including in connection with M&A due diligence) is not automatically unlawful under the U.S. antitrust laws but may be found unlawful to the extent that doing so is likely to have an anticompetitive effect. Exchanging information also may constitute evidence of an unlawful agreement (e.g., to