The FTC warns:

While this behavior is the exception rather than the rule, we have seen circumstances where internal documents expressly contradict representations made by counsel and clients during investigations. We understand that this could happen for innocent reasons – for example, counsel (or even senior business people at clients) may simply be unaware of particular documents – but there have been cases where the innocent explanation seemed implausible … Misstatements also can delay resolution of a matter as they may trigger second-guessing of other representations. They may place additional burdens on third parties where the FTC either needs to go back and reconfirm information, or seek new information as a result of a misrepresentation.

These comments highlight the risk that documents – emails, presentations, and other records – that are poorly worded, misuse legal terms, or are based on incomplete information may restrict counsel’s ability to present the parties’ positions to the FTC. Especially in the context of a fast-moving business deal, hundreds or even thousands of documents can be created that might be subject to FTC or other antitrust enforcement agency review. Counsel is free to place these inconsistent documents in context during a subsequent investigation, but the FTC has emphasized in its recent post that there is a limit to the credibility of such arguments relative to contemporaneously created documents.

The risk of creating inconsistent documents during a deal can be minimized through early, active involvement by antitrust counsel. Reed Smith’s antitrust and competition team is well versed in advising companies and their representatives on best practices in due diligence for compliance with the antitrust laws and to enhance advocacy before the FTC. A clear, coherent message that is fully supported by the party’s documents minimizes the need to resolve potential inconsistencies and delay resolution of an investigation or merger review.