FTC Releases 2020 Thresholds for HSR Filings and Interlocking Directorates and Raises Maximum Per Diem HSR Penalty

Currently, acquisitions resulting in holdings valued at more than $90 million, but not more than $359.9 million, are potentially reportable only if the “size-of-person” test described below is met, and acquisitions resulting in holdings greater than $359.9 million are potentially reportable regardless of whether the size-of-person test is met. These thresholds will increase, respectively, to $94 million and $376 million.

The size-of-person test currently provides generally that at least one “person” involved in the transaction must have annual net sales or total assets of at least $180 million and the other must have annual net sales or total assets of at least $18 million. These thresholds will increase, respectively, to $188 million and $18.8 million.

With the revisions, the five thresholds for acquisitions of voting securities (which specify whether a filing, or successive filing, is necessary) will potentially require notification where the acquisition results in:

• Aggregate holdings of an issuer’s voting securities valued at greater than $94 million, but less than $188 million.
• Aggregate holdings of an issuer’s voting securities valued at $188 million or greater, but less than $940.1 million.
• Aggregate holdings of an issuer’s voting securities valued at $940.1 million or greater.
• 25 percent of the outstanding voting securities of an issuer if the holdings are valued at greater than $1,880.2 million.
• 50 percent of the outstanding voting securities of an issuer if the holdings are valued at greater than $94 million.

The graduated HSR filing fee schedule will shift as follows:
 

Size (Value) of Transaction	Fee
Greater than $94 million, but less than $188 million	$45,000
$188 million or greater, but less than $940.1 million	$125,000
$940.1 million or greater	$280,000

The Federal Register notice on the revised HSR threshold amounts can be found here.

FTC Revises Clayton Act Section 8 Thresholds for Interlocking Directorates

The FTC also announced revised thresholds for interlocking directorates under Section 8 of the Clayton Act. Section 8 prohibits, with certain exceptions, a person from serving as a director or officer of two competing corporations if two thresholds are met. Section 8 as enacted applies if each competitor corporation has capital, surplus and undivided profits of more than $10 million, though not if the competitive sales of either corporation are less than $1 million. These amounts are subject to annual revision; following last year’s revision, they were $36,564,000 and $3,656,400, respectively. The new thresholds, which took effect on January 21, 2020, are $38,204,000 and $3,820,400, respectively. The Federal Register notice on the revised Section 8 thresholds can be found here.

FTC Revises Maximum Civil Penalty Amount for HSR Violations

Finally, the FTC has announced the annual increase to the maximum per diem civil penalty amount for HSR violations, raising the amount from $42,530 per day to $43,280 per day. The new maximum applies to civil penalties assessed on or after January 14, 2020, even where the underlying violation preceded that date. The Federal Register notice on the revised civil penalty amount can be found here.