FTC Releases 2023 Thresholds for Hart-Scott-Rodino Filings and Interlocking Directorates, Raises Maximum Daily HSR Penalty

Currently, acquisitions resulting in holdings valued at more than $101 million but not more than $403.9 million are potentially reportable only if the “size-of-person” test described below is met, and acquisitions resulting in holdings greater than $403.9 million are potentially reportable regardless of whether the size-of-person test is met. These thresholds will increase to $111.4 million and $445.5 million, respectively.

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 $202 million, and the other must have annual net sales or total assets of at least $20.2 million. These thresholds will increase to $222.7 million and $22.3 million, respectively.

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 $111.4 million but less than $222.7 million
• aggregate holdings of an issuer’s voting securities valued at $222.7 million or greater but less than $1.1137 billion
• aggregate holdings of an issuer’s voting securities valued at $1.1137 billion or greater
• 25% of the outstanding voting securities of an issuer if the holdings are valued at greater than $2.2274 billion
• 50% of the outstanding voting securities of an issuer if the holdings are valued at greater than $111.4 million

New Filing Fee Thresholds Effective February 27, 2023

As mandated in legislation passed in late December and discussed in a prior Sidley Update, the FTC has announced a new fee structure effective for filings made on or after February 27, 2023. Fees for small transactions have been reduced, but fees for large transactions have increased substantially. For the first time, the filing fees will change every year, just as the thresholds do. Starting in 2024, the fees will adjust annually based on changes in the Consumer Price Index. These are the new fees:

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 $41,034,000 and $4,103,400, respectively.

The new thresholds, effective as of January 20, 2023, are $45,257,000 and $4,525,700, 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 civil penalty amount for HSR violations, raising the amount from $46,517 per day to $50,120 per day. The new maximum applies to civil penalties assessed on or after January 11, 2023, even where the underlying violation preceded that date. The Federal Register notice on the revised civil penalty amount can be found here.