2017 Revised (Higher) Hart-Scott-Rodino Act Thresholds
The Federal Trade Commission (“FTC”) has announced its 2017 jurisdictional and filing fee thresholds under the Hart‐Scott‐Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). Due to an increase in gross national product over the past government fiscal year, the new thresholds have increased. The increased thresholds will become effective on February 27, 2017, and will apply to all covered transactions that will close on or after that date.
The Hart-Scott-Rodino Antitrust Improvements Act of 1976
The HSR Act provides that, where certain jurisdictional thresholds are met, parties intending to merge or make acquisitions must (absent any applicable exemptions) furnish the Premerger Notification Office of the FTC and the Antitrust Division of the Department of Justice with prescribed information regarding their respective businesses and the proposed transaction, and wait a specified period of time before consummating the transaction. The statutory “waiting period” stays consummation of the transaction for a minimum of 30 days (15 days in the case of bankruptcy or cash tender offers), absent a grant of early termination.
The 2000 amendments to Section 7A of the Clayton Act mandate annual adjustments of the HSR Act thresholds for each fiscal year, based on changes in the gross national product. The revised jurisdictional and filing fee thresholds for this year increase the dollar amount limits for the size of transaction and the size of person at which parties to a transaction are required to make an HSR filing, as well as the filing fee thresholds. Many of the other filing requirements related to dollar amounts in the HSR Act have similarly been increased to remain consistent with the revised jurisdictional and filing fee thresholds.
Section 7(A)(g)(1) of the Clayton Act, 15 U.S.C. § 18(a)(g)(1), provides that any person, or any officer, director or partner thereof, who fails to comply with any provision of the HSR Act is liable for a civil penalty for each day during which such person is in violation. The maximum amount of civil penalty is $40,654.00 per day.
The FTC (the agency responsible for administering the HSR Act) has often stated that it takes compliance with the HSR premerger notification requirements seriously, and that it will not hesitate to seek significant civil penalties from violators; and indeed it has backed this up in recent years with enforcement actions against a variety of defendants (including both companies and individuals). It is therefore important that all parties to a merger, acquisition or joint venture follow adequate measures to ensure compliance with the HSR Act.