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Overview

The Federal Trade Commission has announced the annual adjustment to notification thresholds that determine whether proposed transactions may trigger a filing obligation under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The revised thresholds will apply to all transactions that will close on or after February 27, 2020.

Contents

Under the updated thresholds, the lowest “size of transaction” notification threshold for any non-exempt acquisitions of voting securities, assets, or non-corporate interests will increase from USD 90 million to USD 94 million. For transactions valued above USD 94 million but below USD 376 million, an HSR filing may be triggered only if the below described “size of person” test is satisfied. Non-exempt transactions valued above USD 376 million will trigger an HSR filing obligation irrespective of the size of the parties involved.

The HSR Act “size of person” threshold, when applicable, generally will be satisfied if one party to the transaction has annual net sales or total assets of USD 188 million or more and the other party has USD 18.8 million or more in annual net sales or total assets. In each case, the operative “party” is the ultimate parent entity of the party to the potentially notifiable transaction.

The HSR Act filing amounts remain the same, but the relevant transaction values triggering the higher fee amounts have correspondingly increased.

  • USD 45,000 for transactions valued above USD 94 million but less than USD 188 million
  • USD 125,000 for transactions valued at USD 188 million or more but less than USD 940.1 million, and
  • USD 280,000 for transactions valued at USD 940.1 million or more.

Compliance with the HSR Act is imperative. The FTC previously announced the annual increase of the maximum civil penalty available for HSR Act violations from USD 42,530 to USD 43,280 per day. This new maximum penalty may be imposed for any enforcement action taken on or after 14 January 2020 even if the underlying violation preceded that date.

The Federal Register notice announcing the new HSR Act notification and filing-fee thresholds can be found here. The Federal Register notice on the increase to the maximum civil penalty is available here.

Author

Brian Burke is a partner in Baker McKenzie’s Antitrust Practice Group. He concentrates on federal antitrust and trade regulation issues. He assists clients successfully navigate the merger clearance process before the US as well as international antitrust authorities. Additionally, Brian has extensive experience representing clients outside of the merger context in civil and criminal governmental antitrust investigations as well as in commercial antitrust litigation. He also regularly counsels clients on the establishment and review of antitrust compliance programs and risk assessments as well as pricing/distribution policies. Brian is a member of the Steering Committee for the Firm’s North America Antitrust Practice Group, and is the Firm’s North America representative on its global merger-control taskforce.

Author

John Fedele is a member of Baker McKenzie's antitrust practice and is located in its Washington, DC office. While he has a broad range of antitrust experience, he most frequently represents clients before the Antitrust Division of the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) in investigations of proposed mergers and acquisitions, and routinely analyzes and manages filing obligations under the Hart-Scott-Rodino (HSR) Act and foreign competition regimes.

Author

Creighton Macy has extensive experience representing clients in a wide variety of antitrust matters, including mergers and acquisitions, investigations by the United States Department of Justice and the Federal Trade Commission, private litigation, and counselling on issues such as antitrust compliance. Before joining the Firm, Creighton served as chief of staff and senior counsel in the Department of Justice Antitrust Division, working as a senior advisor to the acting assistant attorney general on civil and criminal antitrust enforcement and policy matters, as well as budget and personnel issues. During Creighton's time at the DOJ, the Antitrust Division undertook an unprecedented volume of high-profile civil and criminal matters.

Author

Teisha Johnson is a member of Baker McKenzie's antitrust practice in Washington, DC. She advises clients on a wide range of antitrust and e-discovery matters, and has considerable experience counseling clients in government investigations, proposed mergers and acquisitions, compliance, and litigation matters.