Managing Antitrust Reviews That Span Multiple International Jurisdictions

Daniel Bonner, Director of Client Solutions at Level 2 Legal, explains how legal teams navigate the complexities of international antitrust reviews.

While the global pandemic appears to have provoked a downturn in M&A transactions after a decade-long bull run, Goldman Sachs analysts expect the current cycle to be short-lived. EY’s Brian Salsberg is already anticipating “there will be a relatively short M&A window that opens as the COVID-19 crisis ends, during which bargains will be had by those with the liquidity and the risk tolerance to move quickly.”

When M&A activity picks up again, transactions that raise anti-competitive concerns may be subject to investigatory antitrust requests from the EC and their home countries. Companies that also operate outside the EU may be subject to similar requests from regulatory bodies in other jurisdictions. Responses to antitrust reviews—known as “second requests” in the US—are typically high-volume, document-intensive, high-stakes discovery projects with aggressive, non-negotiable deadlines. When antitrust scrutiny expands to include multiple international jurisdictions, the stakes become even higher, and project scope and complexity can quickly spin out of control. How do corporations, their counsel, and legal services providers successfully respond to antitrust reviews that span multiple countries?

On-time production is non-negotiable

International antitrust reviews are altogether different from high-volume eDiscovery projects for litigation, where a top priority may be controlling costs. Here, speed and efficiency are crucial, as most M&A contracts tie funding and final sales price to specific timelines. Dealmakers include robust compliance budgets in the transaction price to ensure all necessary resources are online when regulatory approval hangs in the balance. Also, regulators structure their requests in a way that requires massive volumes of work to be completed at warp speed, and deadlines are firm. Very broad requests—for example, a request for production of every document related to market and competition impact in 4 to 6 weeks—are not uncommon.

Here, speed and efficiency are crucial, as most M&A contracts tie funding and final sales price to specific timelines.

Technology is secondary to process and workflow planning

While technology typically plays a leading role in litigation-based eDiscovery projects, the complexity of multi-jurisdictional international antitrust reviews prioritises process and workflow considerations. Corporate counsel, law firm attorneys and the firm’s preferred alternative legal services provider (ALSP) must work together towards precise production candidacy guidelines that account for potential overlap between compliance requirements, as well as jurisdictional-specific strategy where requests vary. And as the narrative unfolds in real time, teams must be ready to pivot quickly while maximizing every second of billable time.

Technology assisted review (TAR) should be used to streamline responsiveness workflows, but attorneys must perform the nuanced analysis required to preserve privilege and ensure compliance with all applicable privacy laws. As production decisions are finalised, careful consideration must be given to GDPR and US privacy law, factoring in the source of the data and the complex privacy frameworks that come with international data transfer and production. While TAR models do not lend themselves to this type of analysis, predictive coding and active learning classifiers—trained with input from attorney subject matter experts (SMEs)—often play a key role in providing answers to early questions and setting strategy. Initial results must be sampled, validated and cross-checked. These technologies, which are now embraced by regulators in the US and are quickly gaining traction in Europe, are also crucial in culling the data set for review and production.

Projects often rely on the work of very large, highly qualified review teams

Assembling a qualified review team is one of the most important tasks when responding to regulatory requests, and COVID-19 also adds another layer of complexity. Because reviewers are dispersed geographically and working from home, they must be thoroughly comfortable with remote working technologies like Zoom and Microsoft Teams and Citrix-based VPN access, and they must be able to adhere to strict project cybersecurity protocols. In my own organization (an ALSP), reviewers undergo initial screening tests for competence. Then they are trained extensively on relevance and other project details, which in the case study example below included the legal nuances that distinguish differences between UK and US privilege laws and privacy regulations. Prospective reviewers are tested again, after which the individuals who don’t meet project standards are off-boarded. There simply isn’t time for mistakes.

Assembling a qualified review team is one of the most important tasks when responding to regulatory requests

Case study

To get a better sense of the scale and complexity of international antitrust review projects and see these principles in action, let’s take a brief look at a recent project my organisation managed for an AmLaw and Global 100 firm. The transaction in question was proposed by a company based in the UK that does significant business in US markets. Once the transaction was announced, a second request was issued by the US Department of Justice (DoJ), followed shortly by a Request for Information (RFI) from the European Commission (EC).

Between the two requests, over 12 million documents from more than 100 custodians were at issue. Subject Matter Experts (SMEs) trained a Technology Assisted Review (TAR) model to identify potential production sets for the DOJ, while search terms provided by the EC were used to identify the potential production sets for the EC.

We then ran filters for privilege and Personally Identifiable Information (PII) against each universe. Client privilege in the UK is significantly different from privilege laws in the US, which meant documents in queue for production to both regulators were reviewed separately for potential privilege issues in each jurisdiction and logged and redacted as necessary. Similarly, a large subset of documents required separate review to ensure compliance with US and GDPR privacy law during production.

Along the way, we recommended meaning dataset reduction strategies and were able to defensibly address and exclude more than 25% of the review population. A team of attorneys that was initially 20-strong during Early Case Assessment (ECA), TAR training, and project kickoff ramped up to more than 100 within a few days, then reviewed the screened documents for privilege and PII for each regulatory body in about a month’s time. In order to complete the project on time, the review team was active about 20 hours per day.

Successful completion of international antitrust review projects like this one requires close attention to the following best practices:

• Strict adherence to timelines and accuracy of production are top priorities. Cost considerations are always important, but at times they take a back seat to getting it done right and on time.
• Before getting up to full speed, meticulous process and workflow planning is essential. Designing workflows that efficiently route documents to reviewers according to the issues presented and jurisdiction-specific requirements is critical. Every possible contingency must be planned for, including abrupt changes in legal strategy by counsel, and with 4-5 workflows ongoing concurrently, the strategic project plan is the foundation for success.
• Have a system in place for thorough vetting, training and testing reviewers. Reviewers must have experience in similar projects, industry-specific expertise, and the ability to quickly understand subtle differences in laws and regulation across multiple international jurisdictions. Reviewers must also be tech-savvy and have a secure home office environment that allows them to engage in long hours of high-intensity work without interruption.

Litigators who are accustomed to complex, high-volume eDiscovery challenges are often amazed at the demands imposed by multi-jurisdiction international antitrust reviews. These are high-pressure, ultra-heavyweight projects requiring precise planning, deep process and workflow expertise, advanced technology and the brute force labor of a crack review team. They aren’t for the faint of heart.