On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act of 2023 (the Act), which changes the fee structure for transactions that are notified under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The Act also requires HSR disclosure of certain subsidies from countries such as China and Russia that any party to the transaction receives. In addition, it provides state attorneys general who bring suit under federal antitrust law greater ability to control where such cases will be heard.
Filing Fees. The HSR Act requires that parties to acquisitions of assets or voting securities that meet jurisdictional thresholds notify the Federal Trade Commission (FTC) and Department of Justice (DOJ) of the transaction. The notifying parties must observe a statutory waiting period before closing to allow the agencies to investigate whether the transaction could harm competition. Notifications under the HSR Act are not free; filing fees currently range from $45,000 to $280,000, depending on transaction value.1
The Act reduces the filing fees for smaller reportable transactions while substantially increasing the fees for larger transactions. The FTC is expected to announce the effective date for the new fees shortly, and the fees will be adjusted annually based on changes in the U.S. Consumer Price Index.
According to the sponsor of the bill, Senator Amy Klobuchar, the legislation is intended to “enable Congress to get much-needed resources to our antitrust enforcers so they can protect competition.”2 The Congressional Budget Office has estimated that the fee increases will increase funding to the FTC and DOJ by about $1.4 billion over five years.
The revised filing fee structure will be as follows (with annual adjustments):
Disclosure of Subsidies From “Foreign Entities of Concern.” The Act further requires parties making premerger notifications to disclose information about subsidies received from “a foreign entity of concern” that any party to the transaction receives. While the exact scope of the reporting obligation has yet to be announced, it will include an obligation to report subsidies received from entities owned, controlled or subject to the jurisdiction or direction of China, Russia, Iran or North Korea, as well as entities subject to various U.S. sanctions. The precise scope of the required disclosures will be defined by upcoming rulemaking.
State AG Powers. Finally, the Act will give state attorneys general increased flexibility to choose a venue for antitrust litigation by exempting antitrust cases brought by multiple states from consolidating into a single venue. As a result, the states will have more control over where antitrust cases they bring under federal law are heard.
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Current HSR filing fees are as follows: $45,000 for transactions valued at $101 million or greater but less than $202 million, $125,000 for transactions valued at $202 million or greater but less than $1,009.8 million, and $280,000 for transactions valued at $1,009.8 million or greater.
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