Senate Amends and Hikes Fees for Premerger Review Process
The Senate passed a bipartisan amendment to H.R. 2617, the year-end omnibus spending bill, which raises filing fees for the Federal Trade Commission's (FTC) Premerger Notification Program, requires companies seeking premerger review to disclose foreign subsidies, and prohibits the Judicial Panel on Multidistrict Litigation from transferring antitrust law enforcement actions brought by state attorneys general to any consolidated multidistrict litigation. Similar language containing all three provisions (H.R. 3843) passed the House of Representatives on September 29, 2022. The higher filing fees and transfer protections are expected to be effective January 1, 2023, although the foreign subsidy disclosure rule will not enter into force until new federal regulations are issued.
First, the amendment will substantially increase the fees under the Hart-Scott-Rodino Act of 1976, as amended ("HSR Act"), by increasing the ranges of transaction size and fees for each merger or acquisition that is subject to review.
Beginning on January 1, 2023, the following ranges and fees will apply:
|Transaction Size||Filing Fee|
|$92 million to $161.5 million||$30,000|
|$161.5 million to $500 million||$100,000|
|$500 million to $1 billion||$250,000|
|$1 billion to $2 billion||$400,000|
|$2 billion and $5 billion||$800,000|
|$5 billion or more||$2.25 million|
The Congressional Budget Office estimates that the increased rates will increase revenue from filing fees by $1.4 billion from 2023 to 2027. The increased revenue will significantly bolster the Department of Justice (DOJ) and FTC's resources to investigate and litigate alleged violations of federal antitrust laws.
Second, companies required to seek premerger review under the HSR Act will have to disclose all "subsidies" from foreign entities of concern which pose a "strategic or economic threat" to the United States. Subsidies are broadly defined to include direct subsidies, grants, loans, loan guarantees, tax or procurement preferences, or government ownership or control. The amendment specifically cites the risk that government-sponsored companies from China could surpass or displace the U.S.'s leadership in emerging technologies though anticompetitive conduct, although 42 U.S.C. § 18741(a)(5) sets forth multiple additional grounds for an entity to receive such a designation. These range from designation as a foreign terrorist organization to economic espionage.
This focus on "emerging technologies" connects to the U.S.'s foreign direct investment regime under CFIUS (Committee on Foreign Investment in the U.S.) and aligns U.S. policy under CFIUS and the HSR Act.
Third, the amendment will give state antitrust agencies more control over their chosen venues to enforce federal antitrust laws. Under current law, antitrust enforcement actions filed by the DOJ or the FTC cannot be transferred by the judicial panel on multidistrict litigation where they would be joined with other private antitrust actions, which often results in slower or more complex adjudication. But there was no similar prohibition against transfer of state antitrust enforcement actions. The State Antitrust Enforcement Venue Act would create federal and state parity by ensuring that antitrust actions brought by states are also immune to transfer. A coalition of 52 state and territory attorneys general resoundingly endorsed both bills in a letter to Senate and House lawmakers in June 2021.
The amendment was sponsored by Senators Amy Klobuchar (D-Minn.) and Mike Lee (R-Utah), chair and ranking member of the Senate Judiciary Committee Subcommittee on Competition Policy, Antitrust, and Consumer Rights. It passed with strong bipartisan support by a vote of 88-8.
The House of Representatives approved H.R. 2617, including the Klobuchar-Lee Amendment, on December 23, 2022. President Biden is expected to sign H.R. 2617 into law before a stopgap government funding measure expires on December 30, 2022.