It is Friday afternoon. A 200-page questionnaire from a regulator lands in the company’s inbox, seeking its views on a proposed transaction within seven days. Whether opportunity or burden, another company’s merger has suddenly become a task of its own. How should a third party approach the response? This post looks at the role of third-party requests for information (RFI) in merger control procedures and offers practical guidance for handling them.
Third-party responses give regulators a view of the market that the merging parties cannot provide themselves. That perspective can become decisive where the parties’ interpretation of competitive conditions differs from market experience.
When the market sees things differently
A prominent example was the European Commission’s market investigation in Siemens/Alstom. A central argument in favour of the transaction was the increasing competitive threat from Chinese suppliers. The Commission’s investigation painted a different picture. According to third parties, Chinese suppliers had not participated in European signalling equipment tenders and had not supplied very-high-speed trains outside China. The Commission concluded that Chinese entry would not constrain the merged business in the foreseeable future. Moreover, the market investigation generated concerns from third parties about reduced competition and innovation. The transaction was ultimately prohibited in 2019.
The significance of market feedback is not inherently negative for merging parties. In EDEKA/Handelshof, the Bundeskartellamt conducted more than 100 interviews with third parties. The responses showed that customers increasingly considered delivery wholesalers an alternative to cash-and-carry wholesalers and that the two channels exerted meaningful competitive pressure on each other. This contributed to the regulator departing from its earlier, narrower market definition and clearing the transaction in Phase I.
Three perspectives on the same questionnaire
For a regulator, third-party evidence provides an important reality check. Internal documents, data and party submissions may suggest how a market operates, but independent third parties can test that narrative against commercial reality.
Merger proceedings run against short statutory deadlines. Regulators therefore depend on receiving market feedback quickly. The Commission itself stresses that effective investigations require responses that are accurate, complete and timely.
For the merging parties, their own submissions remain important, but in complex cases the outcome may ultimately depend on third-party responses. Feedback from customers and suppliers may be anticipated to some extent, but a residual “black box” risk remains.
For third parties, responding to an RFI is often primarily a practical burden. Questionnaires can absorb significant resources and tend to arrive at inconvenient times requiring input from employees whose time is already in high demand. This burden is also due to the short deadlines that characterise merger investigations. A structured approach is therefore essential.
Where to begin
The first step is to identify what the regulator wants to know and which parts of the questionnaire are applicable. This may be less straightforward than it sounds: Lengthy questionnaires do not always reveal their focus at first sight and may use gating questions to determine which subsequent sections must be completed. Once the relevant scope is clear, the company should identify who can provide the answers and determine whether the requested information exists in the required form and whether it can realistically be collected within the time available.
Whether an RFI must be answered depends on its legal basis, as well as the relevant regulator and jurisdiction. Even where a response is voluntary, constructive cooperation generally is advisable. However, any information provided must be accurate and truthful, as misleading or incorrect answers can trigger severe sanctions, regardless of the binding status of the request (as merging parties have recently had to learn the hard expensive way – see our recent blog posts here and here).
The strategic dimension
A third-party response is not given in a commercial or legal vacuum. The respondent will usually at least in the eyes of the regulator have some relationship with the merging parties and may itself operate in markets affected by the transaction. Its answers therefore form part of a broader record: They describe not only the transaction under review, but also the respondent’s understanding of the market and its own position within it.
This does not mean that tactical considerations should override accuracy. But it does mean that statements made under time pressure may have significance beyond the immediate questionnaire.
Before you press submit
When responding to an RFI, third parties should (at least) keep these five points in mind:
- Address timing issues early. Identify early whether a reliable response requires detailed data or input from several business units. Raise any resulting timing issues with the case team and, where necessary, request an extension.
- Be transparent where information is unavailable. The regulator’s categories may not match the way the company records data in its day-to-day business. Explain what is unavailable and identify any estimates. A neutral view is not the same as having insufficient information to form a view: Make clear which applies. Transparency often creates leeway.
- Think beyond the current merger. The respondent’s view of the market and its own market position may be revisited in later proceedings involving the respondent. Do not go further than necessary: Today’s confident assertion may become tomorrow’s inconvenient precedent.
- Use the opportunity to be heard. The RFI opens a direct channel to the regulator. Where the respondent has genuine and well-supported concerns, explain them clearly. Such feedback can direct the regulator’s attention to issues that might otherwise receive less scrutiny.
- Keep advocacy proportionate. The merging parties may be important customers or suppliers. Answer fully and candidly, but be cautious of stating an overall view more forcefully than the evidence requires, particularly where doing so is unlikely to affect the review.
A final remark
Responding to a third-party RFI is often a balancing act. The aim is to cooperate constructively and provide accurate, useful information without devoting disproportionate resources to the exercise.
Photo by Etienne Girardet on Unsplash
