HSR thresholds
Under the HSR Act, certain acquisitions of assets, voting securities, or interests in noncorporate entities (such as partnerships or limited liability companies) are subject to preclosing notification to the U.S. antitrust agencies and waiting period requirements if the applicable jurisdictional thresholds are satisfied and no exemption applies. Each year the FTC adjusts the HSR jurisdictional threshold tests based on changes to the U.S. gross national product.
The principal changes to the HSR jurisdictional thresholds will be as follows:
HSR filing fees
On December 29, 2022, President Biden signed the Merger Filing Fee Modernization Act of 2022 (“Filing Fee Modernization Act”), which contained significant changes to the HSR filing fee schedule. Under the Filing Fee Modernization Act, the FTC adjusts filing fees each year based on changes in the consumer price index.
The 2024 HSR filing fees will be as follows:
HSR civil penalties
On January 10, 2024, the FTC announced that the maximum civil penalties for violations of the HSR Act, which are assessed per day for each violation, were increasing to US$51,744 from US$50,120. This change became effective upon publication in the Federal Register on January 10, 2024.
Interlocking directorates threshold
Section 8 of the Clayton Act prohibits a person from serving as a director or officer of two competing corporations if certain thresholds are satisfied and no exemption applies. The FTC is required to adjust annually certain thresholds related to Section 8 based on changes to the gross national product.
Under the new threshold, which became effective 22 January 2024 upon publication in the Federal Register, a person may not serve as a director or officer of competing corporations if each corporation has capital, surplus, and undivided profits aggregating more than US$48,559,000, unless one of the corporations has competitive sales of less than US$4,855,900. Previously, a person was prohibited from serving as a director or officer of competing corporations if each corporation had capital, surplus, and undivided profits aggregating more than US$45,257,000 unless one of the corporations had competitive sales of less than US$4,525,700.
As we previously reported, the U.S. antitrust agencies have recently cracked down on interlocking directorates. Throughout 2022 and 2023, the FTC and the Antitrust Division of the Department of Justice (the Division) announced numerous settlements with parties in response to “competition concerns” related to the Section 8 prohibition on interlocking directorates. In almost all cases, these settlements required the resignation of directors from the boards of directors of companies where the FTC or the Division identified competition concerns. We expect this will continue to be an enforcement priority for the agencies in the coming year.
