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 29 December 2022, President Biden signed the Merger Filing Fee Modernization Act of 2022, which contained significant changes to the HSR filing fee schedule. These new filing fees will become effective on or about 22 February 2023. Beginning in 2024, the filing fees will be adjusted based on changes in the consumer price index.
The 2023 HSR filing fees will be as follows:
HSR Civil Penalties
On 6 January 2023 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$50,120 from US$46,517. This change became effective upon publication in the Federal Register on 11 January 2023.
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 20 January 2023 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$45,257,000, unless one of the corporations has competitive sales of less than US$4,525,700. 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$41,034,000 unless one of the corporations had competitive sales of less than US$4,103,400.
As we previously reported, the U.S. antitrust agencies have recently cracked down on interlocking directorates. The Antitrust Division of the Department of Justice (the Division) announced late last year that seven directors agreed to resign from the boards of directors of five companies in response to the Division’s “competition concerns” related to the Section 8 prohibition on interlocking directorates. We expect this will continue to be an enforcement priority for the agencies in the coming year.
The FTC's announcement can be found here.
