![handle is hein.journals/clro103 and id is 1 raw text is:
THE HART'SCOTT'RODINO ACT'S
FIRST AMENDMENT PROBLEM
Scott E. Gant, Andrew Z. Michaelson & Edward J. Normand6
The Hart'Scott'Rodino Antitrust Improvements Act (HSR
Act) is a centerpiece of federal antitrust law. Designed to aid
enforcement of Clayton Act Section 7, which prohibits
mergers and acquisitions that _may . . . substantially . . .
lessen competition: or _tend to create a monopoly,:1 the
statute requires the prospective acquirer of an issuer's voting
securities exceeding a certain amount2 to notify the Federal
Trade Commission (FTC) and the Antitrust Division of the
Department of justice (DOJ ) of the potential acquisition, pay
a filing fee,3 and observe a thirty-day waiting period before
proceeding.4 The FTC or DOJ may thereafter issue to the
proposed acquirer a _second request: for additional
information about the acquisition, and conduct an
investigation, take testimony, and seek to prevent the
acquisition. Investors that have acquired shares without
complying with these requirements are subject to civil
penalties of up to $40,000 per day.'
Because the HSR Act is supposed to concern itself only
with transactions that may lessen competition, when
Congress enacted the statute in 1976 it exempted eleven
types of transactions from its filing requirement, and it also
authorized the FTC to exempt other acquisitions _not likely to
violate the antitrust laws.:6 The most prevalent and
e The authors are partners at Boies Schiller Flexner LLP.
1 15 U.S.C. f 18 (2012).
2 Under the current thresholds, if the transaction is more than $80.8
million but less than $323 million, a filing is necessary only if the _size of
person: test is met. 15 U.S.C. 1 8a(2)(B); 82 Fed. Reg. 8524 ( an. 26,
2017). The _size of person: test is satisfied if (a) the ultimate parent entity
(UPE) of either the acquiring or acquired person has sales or assets of $161.5
million or more; and (b) the other UPE has sales or assets of $16.2 million or
more. 15 U.S.C. 1 8a(2)(B)(ii); 16 C.F.R. f 801.1(a)(1); 82 Fed. Reg. 8524 0 an.
26, 2017).
3 The filing fees currently range from $45,000 to $280,000, depending on
the size of the transaction. 16 C.F.R. f 803.9. These fees amount to tens of
millions of dollars annually and provide a substantial portion of the FTC's
operating budget. The FTC 2018 budget request to Congress projects HSR
filing fees of $112.7 million. FED. TRADE COMM'N, CONGRESSIONAL BUDGET
] USTIFICATION, FISCAL YEAR 2018, 2, 4 (2017).
4 15 U.S.C. 1 8a; 16 C.F.R. f 803.10.
5 See 15 U.S.C. 1 8a(g)(1); 16 C.F.R. f 1.98; 81 Fed. Reg. 42,476'78 (June
30, 201 6).
6 15 U.S.C. f 1 8a(c), (d)(2)(B); see also Premerger Notification; Reporting
and Waiting Period Requirements, 53 Fed. Reg. 36,831-03, 36,833 (Sept. 22,
1988) (to be codified at 16 C.F.R. pts. 801 '03) (_[W]henever the Commission can
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