On January 26, 2024, the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (the “Division”) announced that both agencies are updating language in critical documents for civil and criminal matters to emphasize that companies must preserve documents prepared on collaboration platforms (e.g., Teams) or that otherwise exist on ephemeral messaging applications (e.g., Signal). The refined language will appear in preservation letters, specifications in second requests, voluntary access letters, and all forms of compulsory legal process documents and things, including grand jury subpoenas.

Although the agencies explained that these changes merely “reinforce longstanding obligations requiring companies to preserve materials during the pendency of government investigations and litigation,” their focus on and effort to call out these types of information can heighten the risk of enforcement for non-compliance. Because failure to properly retain documents covered by a government investigation or enforcement action can lead to civil spoliation sanctions or, in the most egregious cases, obstruction of justice charges, companies that receive an updated request must take steps—possibly even proactive steps—to ensure that these types of materials are preserved.

New Rules for New Tools

The agencies have long maintained that companies must preserve relevant documents during the pendency of government investigations and litigation, even if the information exists on cutting-edge platforms. But the new guidance underscores the agencies’ focus on two types of emerging technologies:

• Collaboration and Information-Sharing Tools: Companies, particularly in today’s remote work environment, often use advanced collaboration and information-sharing tools in their day-to-day operations, such as co-authoring, live editing platforms, and chat/messaging applications that incorporate document sharing, storage, and collaboration functionality. Because these tools are increasingly used in the ordinary course, regulators are interested in seeing how information was generated and modified in those systems—specifically how they would have appeared to the users themselves.
• Ephemeral Messaging Applications: The primary attribute of these platforms is that messages vanish after a short period of time. According to Deputy Assistant Attorney General Manish Kumar, the Division and FTC expect that “opposing counsel will preserve and produce any and all responsive documents, including data from ephemeral messaging applications designed to hide evidence. Failure to produce such documents may result in obstruction of justice charges.”

A Regular Target for Corporate Compliance

The updated guidance is the latest step in a broader effort by the agencies—and the Department of Justice (DOJ) in particular—to spur greater corporate compliance in light of high-profile spoliation and other evidentiary issues resulting from the failure to preserve new types of documents.

In March 2023, Kenneth Polite Jr., Assistant Attorney General for the DOJ’s Criminal Division, announced that the DOJ was changing how it evaluated a company’s use of communications platforms and messaging applications, including ephemeral messaging. Specifically, when determining whether a company will receive cooperation credit for an effective compliance program, Polite advised that the DOJ would consider a company’s policies regarding employee use of third-party applications, including ephemeral messaging. For a company to receive this type of cooperation credit, Polite explained that these policies must be both tailored to the company’s risk profile and specific business needs, and effectively structured and implemented to ensure that business-related information is accessible and able to be preserved.

Last week, Leslie Wulff, Chief of the Division’s San Francisco office, discussed how a company’s failure to properly retain documents and materials can result in criminal exposure for both company employees and attorneys.[1] She warned that the Division will “scrutinize every decision along the path that led to the deletion of relevant material[.]” This new guidance—particularly its emphasis on the risks posed by software that enables automatic, immediate, and irretrievable destruction of documents—is consistent with the approach articulated in Wulff’s speech.

Key Takeaways

The new guidance crystalizes the antitrust agencies’ expectation that a company’s duty to preserve all types of relevant documents during a merger review or an investigation—whether civil or criminal—includes collaboration platforms and ephemeral messaging applications. In light of this, companies should consider themselves on notice that the agencies expect companies to retain and be prepared to review these types of information, and if they do not, companies should not expect a sympathetic ear.

To ensure compliance, companies should consider the following steps:

• Conduct a regular internal inventory of the collaboration tools and internal chat applications that are used in the ordinary course of business and ensure that relevant data can be preserved and collected.
• Consider the adoption of policies limiting work-related communications to specific platforms and applications with settings that prohibit automatic deletion, and remind employees regularly about these policies.
• When facing an antitrust investigation, confirm that data on collaboration platforms and in third-party applications used for business purposes are being preserved and can be collected.
• Maintain records regarding data storage practices and retention policies.
• Retain counsel and e-discovery vendors experienced in collecting and imaging materials from advanced technology platforms.

[1] Khushita Vasant, US DOJ Official Warns of Criminal Action Against Companies, Lawyers Over Failure to Preserve Communications in Cartel Process, MLex (Jan. 24, 2024).

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