Senator Warren, Rep. Neguse, and Lawmakers Urge the FTC to Finalize Changes to Premerger Notification Form to Strengthen Antitrust Enforcement, Save Taxpayer Dollars
These changes will strengthen antitrust enforcement, promote innovation and competition, and protect national security and economic growth.
Requiring transacting parties to provide regulators with the information necessary to examine a proposed merger is a commonsense way to save taxpayer dollars and enable antitrust enforcers to fulfill their congressional mandate and protect consumers, the economy, and national security.
Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.) and Congressman Joe Neguse (D-Colo.), along with a bicameral group of lawmakers, submitted a public comment to the Federal Trade Commission (FTC) in support of the agency’s proposed changes to the premerger notification form and associated instructions, and the premerger notification rules implementing the Hart-Scott-Rodino Antitrust Improvement (HSR) Act. Proposed in collaboration with the Department of Justice (DOJ), the changes would require companies to provide, in advance of finalizing a transaction, information that the FTC and DOJ need in order to efficiently evaluate whether the proposed transaction is illegal under antitrust law. In the letter, the lawmakers urge the FTC to quickly finalize the changes, supporting them because they are a commonsense way to save taxpayer dollars and enable antitrust enforcers to fulfill their congressional mandate and protect consumers, the economy, and national security.
“This update to the premerger notification process is necessary to respond to increased consolidation and the digital transformation of our economy. Over the last quarter century, 75 percent of American industries have become more concentrated, and since 2008, American companies have engaged in mergers and acquisitions worth over $10 trillion,” wrote the lawmakers.
Signers include: Senators Mazio Hirono and Bernie Sanders and Representatives Becca Balint, Hank Johnson, Rashida Tlaib, Summer Lee, Ilhan Omar, Lori Trahan, Mark Pocan, Katie Porter, Greg Casar, and Cori Bush.
Congress enacted the HSR Act in 1976 to facilitate the FTC and DOJ’s review of proposed mergers and other transactions under federal antitrust laws. The Act requires companies to report to the FTC and DOJ proposed transactions valued above specified thresholds, and allows companies to complete the transaction only after a statutory waiting period has expired. If the reviewing agency determines a transaction would be likely to substantially lessen competition, the agency may initiate an investigation and then negotiate with the transacting parties to address its concern or act to block the merger.
The FTC’s proposed updates to the HSR process are merited, long overdue, and necessary to enable FTC and DOJ staff to effectively review proposed transactions within the limited time specified by law. The current number of full-time FTC staff is similar to what it was in the 1980s, while deal volume has grown 146 percent between 2012 and 2021. Despite these challenges, the premerger notification form (the “HSR Form”) has not been updated in almost 45 years. The current form requires only basic information that does not, on its own, give regulators clarity as to whether a proposed deal may substantially lessen competition.
The new HSR processes will empower antitrust enforcers to fulfill their congressional mandate to identify which transactions should be challenged to prevent harm to American consumers and workers. It will fill key gaps that antitrust enforcement staff most routinely encounter, such as inadequate information about deal rationale or the details of how a particular investment vehicle is structured. It will also gather information about competition, such as information on labor markets, information related to both horizontal and non-horizontal business relationships, details on previous acquisitions, and transactional analyses and internal documents describing market conditions. The new form also implements a 2022 law requiring agencies to collect information on subsidies received from certain foreign governments or entities that are strategic or economic threats to the United States, which will help safeguard national security.
“The FTC’s proposed rule is needed to address the realities of our ever-changing economy, promote competition, and protect national security. We urge the FTC to issue a final HSR Form and associated instructions in line with those that have been proposed, and commend both FTC and DOJ for their efforts to ensure that our economy is competitive, robust, and fair for all participants,” the lawmakers concluded.
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