FTC Responds to Tsunami of HSR Filings

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A Surge of HSR Filings

On August 3, 2021, the Acting Director of the Bureau of Competition of the Federal Trade Commission (“FTC”) authored a blog post discussing the tsunami of Hart-Scott-Rodino (“HSR”) filings that the FTC has received in 2021. The post notes that the number of filings is straining the agency’s capacity to review the proposed transactions within mandated time frames (the “waiting period”). Indeed, by the end of July 2021, the FTC had received more HSR filings than it did for the entire year 2020.

Managing the Filings Spike

As a result of the surge in HSR filings, the FTC has started to send a form letter to some transacting parties for whom the waiting period is set to expire with the investigation yet to be completed. The letter does the following:

  • indicates that the FTC’s investigation remains open, but allows the waiting period to expire;
  • warns that if the transacting parties “consummate [the] transaction before the Commission has completed its investigation, they would do so at their own risk”;
  • further emphasizes that the FTC can bring an action, even if the parties have consummated the transaction; and
  • warns that “inaction by the Commission before the expiration of the waiting period should not be construed as a determination regarding the lawfulness of the transaction.”

A Caveat for Transacting Parties

Parties receiving such a letter from the FTC will need to evaluate their options thoughtfully.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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