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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):
| TRANSACTION VALUES | FILING FEE |
| Greater than $101 million but less than $161.5 million | $30,000 |
| At least $161.5 million but less than $500 million | $100,000 |
| At least $500 million but less than $1 billion | $250,000 |
| At least $1 billion but less than $2 billion | $400,000 |
| At least $2 billion but less than $5 billion | $800,000 |
| $5 billion or more | $2,250,000 |
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.
Footnotes
1. 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.
2. Senator Klobuchar, “Klobuchar Bipartisan
Legislation to Restructure Merger Fees, Strengthen Antitrust
Enforcement Passes Congress” (Dec. 23, 2022), https://www.klobuchar.senate.gov/public/index.cfm/news-releases?ID=D059DD97-DDB5-4C89-90DA-CFF3E203ACDA.
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