FTC & DOJ Temporarily Suspend Practice Of Early Terminations

The Federal Trade Commission (FTC) and Justice Department’s Antitrust Division, which determine if mergers are legal, will temporarily suspend the practice of granting early terminations for mergers, the FTC said in a statement on Thursday, February 4.

With the changeover to President Joe Biden’s administration and a big jump in the number of merger filings, the FTC additionally said the two antitrust regulators will also review “processes and procedures” used to grant early termination.

“We, as an agency and a country, are in unprecedented times, and our obligation is to be responsive to these circumstances, in this case by temporarily suspending early termination,” said Rebecca Kelly Slaughter, Acting Chairwoman of the Federal Trade Commission. “The law provides 30 days for the agencies to review the competitive implications of transactions. Given the confluence of an historically unprecedented volume of filings during a leadership transition amid a pandemic, we will presume we need those 30 days to ensure we are doing right by competition and consumers.” 

“We support the FTC’s decision to temporarily suspend early termination grants to ensure appropriate review of transactions during this challenging transition period,” said Richard A. Powers, Deputy Assistant Attorney General and Senior Supervisory Official of the Department of Justice’s Antitrust Division.

Early termination is when a merger is approved quickly, often within 30 days.