Senior Managing Director, FTI Consulting
I recently joined a Global Competition Review panel of M&A experts to discuss the effects and legal implications of several data-related issues on the merger review process. The panellists from Latham & Watkins, O2 and the European Commission/DG Commission brought a broad range of insights across regulatory, in-house legal and outside counsel perspectives.
During the discussion, we centred on the fact that internal documents have become a significant focus in merger investigations. While this has been standard practice in the U.S. for many years, it’s a relatively recent trend in the U.K. and Europe. As a result, many antitrust agencies are increasingly relying on internal document requests as a way to gain an unfiltered look at a company’s market strategy and view of a transaction. In the U.K., in particular, the Competition and Markets Authority (CMA) has even begun using its statutory powers to issue internal document requests as early as the pre-notification stage.
Many corporations are now grappling with the challenge of timely compliance to these information requests because of ever-increasing data volumes and the need to consider a variety of data sources, including new collaboration platforms such as Microsoft Teams, Slack, Google Workspace, etc. These challenges are only compounded by logistical issues surrounding data collections where organisations need to identify and collect data from various jurisdictions, often now remotely as a result of COVID-19, and then perform large-scale document review exercises in incredibly tight timelines.
In light of the above, in-house legal should engage outside counsel and technology experts as early on in the process as possible to improve their merger-ready response position. This includes adoption of several best practices which were raised during the panel’s discussion:
Looking ahead, the complexities associated with responding to internal document requests is only going to increase in light of continually growing data volumes, a greater variety of data sources, and a wide array of legal and logistical issues arising from cross-border investigations, which often can be driven by multiple antitrust agencies. To deal with this, both regulators and transacting parties will need to rely more on data experts and new AI-based technologies to streamline the response process and ensure it is performed in a defensible and robust manner.