The US Department of Justice (DOJ) is taking a closer look at Uber’s plans to buy Postmates, Uber disclosed in a regulatory filing. In the filing, Uber disclosed that the DOJ has issued a “second request” to both companies, temporarily halting the deal while the government gathers more information.
Under antitrust laws, companies must wait, typically 30 days, to close a potential deal after informing the government of their plans. If regulators believe the merger might harm competition, they can issue a second request to require the companies to provide more details about things like pricing, customers, and market share.
“If you’re at a second request, you’re often concerned about the deal,” Sam Weinstein, a law professor at Cardozo who previously worked in the DOJ’s antitrust division, told Business Insider.
“Some very small percentage of [merger] filings go to second request,” he said. Other antitrust lawyers confirmed to Business Insider that agencies file second requests in fewer than 10% of proposed deals.
That request effectively stops the clock on the Uber and Postmates deal until both companies “substantially comply” by turning over additional information to the DOJ, which Weinstein said “could be months and likely would be months.”
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