The Bottom Line
- The Justice Department recently announced a plan to streamline complex merger investigations, potentially lessening the burden for parties seeking approval under the Hart-Scott-Rodino Act.
- While the proposal offers a more efficient path to clearance for some transactions, the overall result may be a department with surplus bandwidth it can use to conduct more investigations.
- Overall, the impact may be that the HSR process impacts a broader cross-section of deals than in the past.
Second Request investigations are a notoriously costly and burdensome part of the antitrust merger review process for both companies and the government. When the Department of Justice’s Antitrust Division announced a plan for phased Second Request investigations last month, many saw it as a much-needed concession to merging parties that would make merger reviews more efficient.
On paper, the change is intuitive. By narrowing the initial focus to core competitive issues and offering a guaranteed “front office” meeting with senior officials before demanding full compliance, the DOJ provides an off ramp for complex but ultimately less problematic transactions. However, beneath this surface-level efficiency lies a structural shift that could impact the landscape of antitrust enforcement in unexpected ways.
A closer examination of the division’s resource economics reveals a counterintuitive reality: by clearing complex transactions more rapidly, the DOJ is effectively expanding its investigative bandwidth, lowering the barrier to entry for Second Requests, and potentially paving the way for a higher volume of investigations.
To understand this potential shift, one must first recognize the weight of a traditional Second Request. For decades, receiving a Request for Additional Information and Documentary Material under the Hart-Scott-Rodino Act has been one of the most resource-intensive processes in corporate law.
A standard request demands the collection, processing, and production of millions of documents, spanning dozens of custodians across global business units. It requires complex data pulls, extensive economic modeling, and millions of dollars in vendor and legal fees. For the merging parties, it can produce an agonizing war of attrition that routinely delays closing by many months, and sometimes over a year.
A traditional Second Request is also a massive undertaking for the government. Reviewing massive amounts of corporate data requires an army of staff attorneys, paralegals, and economists.
The antitrust division operates under strict budgetary and headcount constraints. At any given moment, the division simply doesn’t have the manpower to conduct full-scale Second Request investigations into every transaction that raises theoretical competitive concerns. Instead, the DOJ must triage incoming filings, identifying those that look most problematic and at times declining to review transactions that could raise issues.
That this is true is evident from the data that the DOJ and FTC publish on HSR Act investigations. Each year, the number of transactions notified under the HSR Act varies with market trends, and the number of preliminary antitrust investigations (that is, those “cleared” to the DOJ or FTC for further review) likewise fluctuates, presumably impacted by both the volume of transactions notified as well as agency-specific factors and priorities.
However, the number of Second Request investigations tends to remain within a limited band, rarely exceeding 30 per year, even in years where the number of preliminary investigations is unusually high.
This pattern suggests the scope of a traditional Second Request has served as filter, albeit an unintended one, for the DOJ’s enforcement decisions. Because issuing a Second Request has been so expensive for the DOJ in terms of human capital, agency officials inevitably have to choose in some cases that the cost of a Second Request, in terms of the manpower and time required, isn’t justified.
The closer the agency is to 100% utilization at any given point in time, the less bandwidth it has to commit to issuing a new Second Request. Even in years where preliminary investigations are elevated, these have not translated into large upticks in Second Request investigations.
The July 2026 Model Timing Agreement could, at least in theory, alter this calculus by breaking the monolithic Second Request into manageable phases. Under the new framework, a Second Request investigation would begin with a “Priority Production.” The division and the merging parties negotiate a targeted set of materials, limiting the scope to a handful of key decision-makers, specific datasets, and more tailored parameters for searching and producing company emails and other documents, all designed to illuminate the core competitive overlap.
Within approximately three weeks of certifying compliance with this narrowed priority production, the parties are granted a meeting with the DOJ’s front office. Here, the parties present their defense directly to division leadership, using the priority documents to argue that the transaction won’t substantially lessen competition. Under the new model Timing Agreement, following this meeting, the division is bound by a 14-day window to make a determination: close the investigation, narrow the scope of the remaining requests, or demand a transition into a traditional, full-phase review.
The phased framework undeniably provides significant benefits to parties whose deals are cleared without full compliance with the Second Request. By avoiding full compliance, corporations stand to save millions in costs and months of agonizing delay. But the implications for the DOJ’s internal resources could be more profound in the long run.
Consider a hypothetical complex transaction that would have resulted in a standard Second Request under the traditional HSR framework. The DOJ would assign a team of staff attorneys and economists to the matter. For many months, that team would be consumed by document review, depositions, and economic modeling. If the DOJ ultimately elected not to bring a case, then thousands of hours of agency bandwidth were sunk into a single merger clearance.
Under the new expedited framework, that same transaction could be resolved in less than three months. The priority production focuses the team immediately on the dispositive issues. The front office meeting forces early evaluation. If the deal clears at the 14-day decision point, the investigation is closed.
The critical question for antitrust practitioners is: What happens to those attorneys and economists who’ve just had several months of their year freed up?
They don’t sit idle. They’re immediately reassigned to the next deal on the docket. By shortening the lifecycle of investigations that ultimately don’t result in enforcement actions, the DOJ may get a surplus of investigative bandwidth. Such a change could fundamentally shift the agency’s triage calculus during the initial 30-day HSR waiting period, both because it has more resources available and because the potential cost of proceeding to a Second Request is lower on average.
The impact may be most significant for transactions where competition concerns are less clear cut. In the past, when the DOJ reviewed a transaction presenting novel or speculative competitive issues, its leadership faced a binary choice: clear the deal immediately or commit an entire investigative team to a time-intensive Second Request.
Because the cost of being wrong was high, many such deals likely benefited from the agency’s limited capacity. However, the July 2026 framework revises that binary constraint by providing an earlier potential offramp: If the priority production reveals that the initial competitive concerns were unfounded, the agency can simply close the investigation after the front office meeting and reallocate the staff to the next target.
If the streamlined Second Request process takes root, corporate boards and M&A advisers may need to adjust their expectations regarding clearance timelines.
There have always been a handful of transactions each year for which a Second Request investigation is inevitable, and the new Model Timing Agreement may benefit those deals by creating a clear path to an expedited decision. But perhaps counterintuitively, the transactions with less obvious competitive problems are most likely to be impacted if the DOJ is able to shift allocation of resources away from the obvious problem deals.
Transactions that would’ve historically been viewed as clean or likely to be cleared after preliminary questions might now find themselves ensnared in a Second Request’s Phase 1 priority production simply because the DOJ has the bandwidth to take what it considers to be a quick look. Deal timing agreements and outside date provisions in merger agreements would need to account for the increased probability of facing an initial, albeit truncated, investigation.
For deals that do end up in the Second Request process, the initial front office meeting could become the critical juncture of the entire investigation. The priority production must be strategically negotiated not just to minimize burden, but to ensure that the documents ultimately produced affirmatively support the parties’ defense narrative.
The 21-day window between production and the front office meeting leaves no room for discovering bad facts late in the game. This might even mean that parties with deals that will raise potential concerns need to get more familiar with their documents and data even earlier in the process, well before agreeing to any model timing agreement calling for expedited productions. It could mean more costly merger reviews, especially at the early stages of the process.
Conventional wisdom views the phased approach as a tool to streamline the clearance of individual deals. But antitrust practice requires looking beyond the single transaction to the mechanics of the antitrust agencies themselves.
The antitrust division’s adoption of the phased Second Request framework is a meaningful attempt to modernize a deeply antiquated process. For the right transactions, it may offer a more efficient path to clearance that will save merging parties substantial time and capital.
However, the broader implications of this policy shouldn’t be ignored. By solving its own resource bottlenecks, the DOJ has armed itself with the capacity to review a larger cross-section of the M&A market. As the barrier to entry for investigations falls, the legal and corporate communities may find themselves facing a new era where the “quick look” becomes the new standard, and the net of antitrust enforcement is cast wider than ever before.
This article does not necessarily reflect the opinion of Bloomberg Industry Group Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.
Author Information
Michael Wise is the US antitrust & competition practice group leader at Squire Patton Boggs LLP, resident in the Washington, DC office.
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