FTC Issues Guidance on Avoiding Anticompetitive Information Sharing During Merger Negotiations

On March 20, 2018, the FTC published a blog post on the risks of enforcement actions for illegal information sharing during the premerger process. The FTC highlighted certain information that could be competitively sensitive, such as current and future price information, strategic plans, and costs, especially where the parties are competitors. Recently, antitrust agencies took action against a hair transplant services company after sensitive information was shared with a competitor performing diligence and against two welded-seam aluminum tube manufacturers that shared sensitive information while competing in a highly concentrated market. The Commission recommended procedural safeguards such as limiting certain information to so-called clean teams of personnel not responsible for competitive planning, pricing or strategy, and using independent agents to handle competitive information. The FTC also advised that disclosing parties should abide by document destruction requirements to reduce the risk of future misuse of competitively sensitive information.