The U.S. Chamber of Commerce has sued to block the Federal Trade Commission’s (FTC's) recently finalized changes to the filings parties must submit prior to a merger.
The regulator had introduced its proposed changes to the Hart-Scott-Rodino (HSR) Form in 2023 and finalized the adjustments in October despite pushback from industry groups, including those representing healthcare providers.
Barring a court injunction or action from the incoming Trump administration, the final rule is set to go into effect Feb. 10.
FTC commissioners voted 5-0 in favor of the final rule, which they said would provide regulators with the additional information necessary to spot potential antitrust. The agency also pointed to the increasing volume and complexity of dealmaking (such as horizontal integrations) in the roughly 45 years since the HSR form was updated.
Still, the agency acknowledged that the updated HSR form would bring additional burden to merging parties, and estimated in its own analysis a jump in the average preparation burden from 37 hours per filling to 144 hours.
The Chamber of Commerce jumped on those “alarming and unprecedented new burdens” in the lawsuit, in which it wrote that “no rational cost-benefit analysis could have concluded that the Rule’s additions to the premerger notification form are worth the candle.” The business group said that the increased burden will stifle consummations that could bring “significant value to consumers and the larger economy” and suggested that the requirements currently in place have been sufficient for the FTC to catch the “handful of mergers” that warrant antitrust attention.
The Chamber of Commerce also wrote that the “dramatic expansion of the premerger notification form is not simply a bad idea, though it is that,” but that it exceeds the FTC’s authority under the relevant statute (the HSR Act of 1976) and is a violation of the Administrative Procedure Act’s prohibition on arbitrary and capricious decisionmaking.
The complaint was filed in the U.S. District Court for the Eastern District of Texas. The Chamber of Commerce is joined by co-plaintiffs Business Roundtable, the American Investment Council and the Longview Chamber of Commerce, the lattermost of which is based in eastern Texas.
The HSR Form is a requirement for companies entering transactions exceeding a certain threshold, recently set to $126.4 million for 2025. After filing, the parties must give the FTC and Department of Justice 30 days to determine whether a more thorough antitrust investigation is necessary.
The groups are asking the court to toss the final rule entirely or in part and to enjoin the FTC from enforcing it. Such a ruling “could have far-reaching implications for the future of the HSR rules and regulatory environment for mergers and acquisitions,” law firm Holland & Knight wrote in an online blog post.
The lawsuit could have an impact on the final rule’s implementation timeline, as plaintiffs could seek a preliminary injunction to push back the Feb. 10 start date. Additionally, the incoming Trump administration could institute a 60-day regulatory freeze upon taking office that would impact the final rule.
The opposition is likely supported by the American Hospital Association, which previously voiced its critiques of the HSR Form updates in news releases and comments submitted to the FTC.
"The FTC still has not sufficiently explained why all this information is needed,” Chad Golder, the group’s general counsel and secretary, said in an October statement. “The agency already has more than enough information about hospital transactions, and it has shown no hesitation in challenging them. The final rule will just require hospitals to divert time and resources away from patient care towards needless compliance costs.”