Under federal law, the Antitrust Division at the Department of Justice (DOJ) must challenge any merger that could “substantially lessen competition.” To enforce the antitrust laws, the DOJ is empowered by federal law to review all mergers of a certain size – transactions valued at more than $76.3 million. If the merging parties meet these requirements, they must file the merger with the DOJ and allow an initial 30-day review process to commence. During that time, the parties may voluntarily submit information. However, if after this initial review the DOJ still has competition questions, it will enact a “second request.”
The second request has no limit in duration and can often last over a year. During this process, the DOJ broadens the investigation and not only collects information from the parties but also from third parties including market participants and consumers. This second request also involves significant production of documents and information and involves the depositions of key company executives. After this lengthy process, if the DOJ is concerned about potential anticompetitive effects, they will file a complaint in federal court seeking to stop the merger.
For Anthem/Cigna and Aetna/Humana, the parties are currently engaged in the second request process. Third parties, including consumers, employers, unions, rivals, buying groups, patient groups and others should express their views on the potential effects of the merger. The DOJ has a strict confidentiality process and the identity of anyone talking to the DOJ is closely guarded. While parties anticipate closure in the second half of 2016, there is no deadline on the DOJ’s investigation.
For more information on complaints, click here.