These higher fees are expected to help fund expanded merger review activity by the agencies, particularly for larger transactions, and will significantly increase the expense of obtaining HSR clearance.

On December 29, 2022, President Joseph R. Biden Jr. signed the Consolidated Appropriations Act, 2023, which included provisions that significantly change the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) filing fee amounts and fee tiers for reportable mergers and acquisitions. Other changes include new, forthcoming reporting requirements for subsidies received from foreign entities aligned with certain governments, among other entities, and an exemption to multidistrict litigation consolidation for antitrust actions filed by state attorneys general.

HSR Act Filing Fees

Under the HSR Act, parties to mergers and acquisitions meeting statutory size thresholds, absent exemption, are required to submit pre-merger notification filings to the Federal Trade Commission (FTC) and Department of Justice and pay a significant filing fee to the FTC. The newly enacted legislation, titled the Merger Filing Fee Modernization Act of 2022 (MFFMA), will significantly change the existing fee structure, lowering the fee for some smaller transactions while dramatically increasing the fee for larger transactions.

The MFFMA increases the number of fee tiers to six, up from the three tiers under prior law. The new fee amounts range from $30,000 to $2.25 million―much wider than the prior range of $45,000 to $280,000. Parties to transactions valued between $1 billion and $2 billion will have to pay $400,000 instead of the previous top level fee of $280,000. The fee for transactions valued between $2 billion and $5 billion will be $800,000, and for those valued at $5 billion or above, the fee will be $2.25 million. These higher fees are expected to help fund expanded merger review activity by the agencies, particularly for larger transactions, and will significantly increase the expense of obtaining HSR clearance.

The MFFMA’s new fee structure is set out below:

The size of transaction thresholds and filing fee amounts will be adjusted annually to reflect changes in GDP and the consumer price index, respectively. Under prior law, only the size of transaction thresholds were subject to adjustment.

The act does not specify when the agencies will begin charging the new fees, and further detail is expected from the agencies in the days ahead.

Disclosure on Subsidies from Foreign Entities of Concern

The MFFMA also mandates that the FTC issue rules requiring any filing party that receives subsidies from a “foreign entity of concern” to provide detailed information regarding such subsidies in its HSR filing. These foreign entities of concern currently include the governments of North Korea, China, Russia and Iran, as well as a variety of other entities defined by the Infrastructure Investment and Jobs Act. These requirements are effective upon the new FTC rules taking effect.

State Attorneys General Antitrust Actions Not Subject to Multidistrict Litigation Transfer

Additionally, the MFFMA exempts antitrust suits brought by states from a process that allows suits pending in different judicial districts to be consolidated in a single district by the Judicial Panel on Multidistrict Litigation. This exemption will allow states to maintain their antitrust suits in the judicial venue of their choice. Under prior law, only antitrust actions brought by the United States were covered by this exemption.

For More Information

If you have any questions about this Alert, please contact Edward G. Biester III, Sean P. McConnell, Nathan Heeter, any of the attorneys in our Antitrust and Competition Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.