Congress Raises Filing Fees for Large Deals, Adds Foreign Subsidy Disclosure Requirement and Enables States to Retain Home Venue

Revised Filing Fees and Transaction Thresholds

The Act updates merger filing fees under the HSR Act for the first time since 2001, lowering fees on most acquisitions valued at less than $500 million and raising fees significantly for larger transactions. Upon effect, the highest filing fee will increase from $280,000 to $2,250,000, while the lowest filing fee will decrease from $45,000 to $30,000. Filing fees will adjust each year based on annual increases in the U.S. Consumer Price Index. Size of transaction thresholds will continue to be adjusted based on annual changes in U.S. gross national product.

The modified fee structure is expected to generate additional revenue to fund enhanced FTC and DOJ antitrust enforcement. The Biden administration asserted that the increase in fees is necessary to keep pace with the rise in the number, size, and complexity of transactions notified to the FTC and the DOJ and makes the process fairer by lowering fees for smaller transactions and raising them for the largest transactions, which frequently require more extensive review.

The Act does not provide an effective date for the revised fee structure but is expected to take effect in 2023, according to a press release from Democratic Sen. Amy Klobuchar of Minnesota. The effective date will be announced on the website of the FTC Premerger Notification Office and may become effective with minimal notice.

Under the Act, the new transaction value thresholds and filing fee amounts are as follows:

*Size of transaction thresholds will adjust upward in early 2023 in accordance with the annual change in U.S. gross national product.

To illustrate how significant these fee changes are, the following table shows the current transaction threshold and fee structure:

Disclosure Requirements of Subsidies by Foreign Adversaries

The Act further requires parties making premerger notifications to disclose information about subsidies received from “a foreign entity of concern,” due to concerns that such subsidies can undermine competition both during the bidding process and after completion of an acquisition. A foreign entity of concern is defined to include an entity owned by, controlled by, or subject to the jurisdiction of China, Russia, Iran, and North Korea, as well as terrorist organizations designated by the Secretary of State, entities associated with specifically designated nationals, and entities involved in “unauthorized conduct that is detrimental to the national security or foreign policy of the United States.”

The Act requires the FTC and the DOJ, in consultation with the heads of certain agencies, including the Committee on Foreign Investment in the United States (CFIUS), the Department of Commerce, and the International Trade Commission, as well as the United States Trade Representative, to determine the documentary material and information that must be submitted with premerger filings regarding such foreign subsidies. The new disclosures will be required after rules related to the disclosures become effective.

Venue for State Antitrust Enforcement

The Act also restricts the removal of antitrust cases brought by state Attorneys General. Prior to the Act, the Judicial Panel on Multidistrict Litigation was permitted to consolidate multiple cases that share one or more common questions of law or fact into a single district for litigation, with an exception for cases brought by the federal government. The Act expands that exception to include antitrust cases brought by state Attorneys General. Accordingly, states will be exempted from having their antitrust cases consolidated into multidistrict litigation and transferred to a venue different from where the state originally sued.

Proposed Technology-Focused Legislation

Some members of Congress tried to incorporate technology-related antitrust bills into the omnibus legislation. These bills include the American Innovation and Choice Online Act (AIOCA), which would prohibit large tech companies from giving preferential treatment to their own products, and the Open App Markets Act (OAMA), which would establish certain pricing and fee rules for application developers and forbid app stores run by Google and Apple from requiring developers to directly use their in-app payment systems. However, despite generating substantial media attention, neither AIOCA nor OAMA was included in the passed appropriations legislation.

Sidley’s Comprehensive Capabilities

Sidley’s antitrust lawyers help clients prevail in high-stakes antitrust matters. We have a deep and talented roster of antitrust practitioners, many with experience as regulators and prosecutors. Respected legal-ranking entities consistently recognize Sidley as having one of the best antitrust practices in the United States as well as in Europe and Asia.

A significant part of Sidley’s global antitrust practice involves counseling clients concerning contemplated mergers, joint ventures, and similar transactions and advising and representing clients in all phases of the merger control process. Many of the merger transactions we handle involve multijurisdictional merger control issues, including merger filings and the defense of transactions in jurisdictions on every continent. In addition, in the United States, we are experienced in defending transactions investigated by state Attorneys General in addition to the FTC and the DOJ.