1. Merger Working Group Workshop March 10-11, 2009 – Taipei, Taiwan Introduction to Merger Investigation and Investigative Planning International Competition Network

2. Introduction I.Planning the Investigation II.Focusing the Investigation III.Managing the Investigation and Evidence IV.Timing: Keep an Eye on the Clock Resource Materials ICN Investigative Techniques Handbook International Competition Network

3. Planning the Investigation Why make it simple when it can be complicated? Does it really have to be that complicated? NO International Competition Network

4. Planning the Investigation Planning Based on Level of Scrutiny Needed: –If no competitive concerns, no formal plan needed Quick review of notification filing or public data may be sufficient Goal is to clear transaction quickly –Initial Stages of an Investigation Main goal is to determine quickly whether to conduct in-depth review Often there is some competitive overlap Initial plan may be simple and even expressed orally Focus on discrete tasks such as specific interviews and document requests that can be completed in limited time period International Competition Network

5. Planning the Investigation How to Develop an In-depth Investigation Plan –Plan is cooperatively developed by team and may include a brainstorming session to identify: likely areas of concern; critical issues and possible theories of harm; facts needed to resolve critical issues; possible sources of information. –Team considers time constraints; –Team considers resources needed; and –Team develops a written plan. International Competition Network

6. Planning the Investigation An Investigation Plan covers three primary areas: –Candidate Theories of Harm Plan may include: the reason for the investigation; main issues to be investigated; possible remedies –Sources of Evidence Plan may cover: the types of information needed; likely sources of information; method to gather information –Timing and Administrative Tasks Plan should include: an overall timing plan; case agenda schedule; various administrative tasks International Competition Network

7. Planning the Investigation Candidate Theories of Harm – Brief Description of Transaction Fantasy Beverage, the largest bottled water company, proposes to acquire Just Energy Inc., the leading energy drink company –Reason to Investigate Merger would combine #1 and #2 sellers of energy drinks –Working Theory of Harm Merged firm could maintain higher prices for energy drinks if it dominates a well-defined market for energy drinks, with an 80% market share and if price increases would not be defeated by expansion or entry into that market –Key Factual Issues to Resolve Product Market Expansion/Entry International Competition Network

8. Planning the Investigation Sources of Evidence –Type of Information E.g. price and quantity data –Sources Merging Parties Competitors Customers –Methods to Gather Information Interviews Written requests for information or document production –Voluntary or compulsory International Competition Network

9. Planning the Investigation: Investigation Agenda International Competition Network

10. Keeping the Investigation Focused Planning is continuous Develop and prioritize candidate theories –Identify potential issues, pursue those most likely to reveal effects Discuss theories of competitive harm –Expose arguments to critical analysis from merging parties and third parties Test with evidence, reevaluate and revise –Test theories with facts, revise theories according to facts Focus the Facts –Prioritize and narrow the search for relevant information –The critical and possibly disputed facts become narrower as the matter progresses International Competition Network

11. Managing the Investigation and Evidence Organize the Information –Develop a document that organizes case information (by product or by issue) –Consider how technology may help you be more efficient Maintain Communications –Dialogue with Merging Parties – regular opportunity to discuss progress –Dialogue with Third Parties – can provide crucial fact information and perspectives on merger –Keep decision makers informed International Competition Network

12. Timing: Keep an Eye on the Clock Investigation team should use the initial phase to frame issues for inquiry and quickly identify issues that are not of concern. In an in-depth review, the investigation team may confront timing issues in three contexts: –Statutory Periods –Internal Timetables –Timing Agreements Managing an investigation within time limits is a challenge International Competition Network