U.S. antitrust changes signed into law
Partner, Co-Head Antitrust
Eun Joo Hwang
05 January 2023
On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act of 2023 (the Act), a nearly $1.7 trillion appropriations bill that funds the government through September 30, 2023. The massive spending bill includes several antitrust provisions. The Act immediately increases funding for the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division (DOJ) for FY 2023 and enacts an eight-fold increase in the premerger filing fees for mega-sized deals beginning sometime in 2023. Additionally, the Act will require disclosure of contributions from certain foreign entities and will give state attorneys general the ability to prevent the transfer of antitrust lawsuits from the venue of their choice.
Better resourced antitrust enforcers
The Act allocates significant additional resources to the two federal agencies responsible for antitrust enforcement in the U.S., the FTC and the DOJ. In FY 2023, the antitrust authorities will receive significant boosts to their budgets, with an additional $50 million in funding for the FTC and $30 million in funding for the DOJ Antitrust Division.
Although both allocations are much less than the full increases sought by the agencies, the additional funding should help to ease the burdens complained of by the agencies over the past couple of years. In recent years, the FTC and DOJ have faced a surge in merger filings which has forced them to take a number of unprecedented steps, including suspending grants of early termination and issuing “warning letters” notifying merger parties that the agencies retain the power to challenge consummated mergers, even following the expiration of the Hart-Scott-Rodino (HSR) statutory waiting period.
Changes (and increases) to HSR premerger filing fees
The Act implements significant changes to HSR Act premerger filing fees, the first updates since 2001. Filing fees for deals valued under $1 billion remain largely comparable to what they are today, but fees for deals valued at or above this threshold will increase significantly. Starting in 2023, once the FTC publishes guidance on the new fee structure, mergers valued at or above $1 billion will incur a filing fee of at least $400,000 with the largest deals, those valued at $5 billion or more, paying $2.25 million, an eight-fold increase over the largest currently applicable fee of $280,000.
The fee schedule will be adjusted annually based on the Consumer Price Index. This is a change from the previous structure where the fees remained fixed from year to year.
Changes to HSR Premerger Filing Fees
|New deal value threshold||New HSR filing fees|
| Valued in excess of $101 million (as adjusted) but less than $161.5 million (as adjusted)
|| $30,000 (as adjusted)
| Valued at $161.5 million (as adjusted) or greater but less than $500 million (as adjusted)
||$100,000 (as adjusted)|
| Valued at $500 million (as adjusted) or greater but less than $1 billion (as adjusted)
||$250,000 (as adjusted)|
| Valued at $1 billion (as adjusted) or greater but less than $2 billion (as adjusted)
||$400,000 (as adjusted)|
| Valued at $2 billion (as adjusted) or greater but less than $5 billion (as adjusted)
||$800,000 (as adjusted)|
| Valued at $5 billion (as adjusted) or greater
||$2.25 million (as adjusted)|
Disclosure of contributions from “Foreign Entities of Concern”
The Act incorporates an important new disclosure requirement for so-called “foreign entities of concern.” Parties to a transaction that is notifiable under the HSR Act will be required to disclose the involvement of certain foreign entities in the transaction or its funding. This is a change that mirrors developments in Europe and the UK.
Under the new law, parties making HSR notifications will be required to disclose information about backing or subsidies received from any “foreign entity of concern” (defined under 42 U.S.C. § 18741(a)). This would include entities controlled by the governments of China, Russia, Iran, and North Korea and entities associated with specifically designated nationals and others.
This new provision will require parties receiving such aid to include in the notification a detailed accounting of each subsidy.
Implementation of this notification requirement remains subject to rules that are to be promulgated by the antitrust agencies, in consultation with the Committee on Foreign Investment in the United States, the Department of Commerce, the International Trade Commission, the United States Trade Representative, and any other appropriate agencies, to promulgate rules under the formal rulemaking process. This process is lengthy and subject to public comment, thus it will be some time before this change is implemented.
Antitrust venue act empowers State Attorneys General
A final antitrust provision, lifted from the State Antitrust Enforcement Venue Act, gives state antitrust enforcers (usually the state’s attorney general) additional powers to dictate the venue in which they pursue antitrust suits under federal law. In essence, the law extends to state antitrust enforcers the same exception currently applicable to actions by federal government antitrust enforcers. This exception prevents consolidation of enforcers’ antitrust cases into a multidistrict litigation panel and a possible change in venue from the venue in which the state originally filed, making it more likely that enforcers can keep antitrust suits in their home states.
While the banner antitrust legislation targeting “Big Tech” failed to pass this Congress, significant antitrust reforms were incorporated in the omnibus funding legislation signed into law by President Biden. The law dedicates additional resources to the FTC and DOJ, raises HSR filing fees for the largest transactions, requires disclosure of subsidies received from certain foreign powers, and bolsters the ability of state enforcers to choose the venue in which to pursue antitrust actions. A&O is monitoring the progress and implementation of these new changes and will provide updates on any significant new developments.