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Antitrust Division Supports Modernizing Merger Filing Exemptions For Certain Investments

On Monday, September 21, Assistant Attorney General Makan Delrahim concurred in the Federal Trade Commission’s (FTC) Federal Register publication of a Notice of Proposed Rulemaking (NPRM) to revise the premerger notification rules (the Rules) that implement the Hart-Scott-Rodino Antitrust Improvements Act (HSR).

The NPRM proposes to create a new reporting exemption for certain de minimis investments of 10% or less.  The proposed amendments in the NPRM also change the definition of “person,” and make explanatory and ministerial changes to the HSR Rules as well as the HSR Form and Instructions to effect the proposed amendments.  In another Advance Notice of Proposed Rulemaking (ANPRM), also supported by the Antitrust Division, the FTC seeks to gather information, related to seven topics, that will help to determine the path for future amendments to the HSR Rules.

“One of my goals as Assistant Attorney General has been to right-size the HSR regime to better account for how the economy has changed in the decades since the HSR regime was first enacted, including changes in the investment landscape and investor behavior,” said Assistant Attorney General Delrahim.  “I am pleased to be working with the FTC towards this goal.  In particular, I have been an advocate for the creation of a new exemption for certain de minimis investments of 10% or less in order to address the regulatory burdens of an overbroad HSR requirement for certain minority investments that do not raise competition concerns.”

A comment period will follow publication in the Federal Register, and the Antitrust Division encourages all interested stakeholders to submit comments on both the NPRM and the ANPRM.  The Antitrust Division is particularly interested in comments on the following features of the NPRM, which will greatly benefit both the Antitrust Division and the FTC as they work collaboratively towards a final rule:

  • The Director/Officer Carve-Out: Should this carve-out be removed, given that the new exemption already has carve-outs for competitors and common ownership?  How does it meaningfully increase the likelihood of receiving filings that have the potential to raise competition concerns?
  • The Vendor/Vendee Carve-Out: Should this carve-out be removed?  Does it meaningfully increase the likelihood of receiving filings that have the potential to raise competition concerns?