Skip to main content

Premerger Notification Proposal Faces a Rocky Path

September 11, 2023

At The Regulatory Review, CTIC Senior Fellow Justin (Gus) Hurwitz examines the FTC’s recent proposed changes to its premerger notification forms, arguing they are unlikely to survive judicial review.

In a recent announcement, the Federal Trade Commission (FTC) proposed extensive changes to Hart-Scott-Rodino (HSR) premerger notification form.

Writing for The Regulatory Review, Justin (Gus) Hurwitz, Senior Fellow and Academic Director of the Center for Technology, Innovation & Competition (CTIC) at the University of Pennsylvania Carey Law School, argues that the changes are unlikely to survive judicial review.

Hurwitz’s work builds on his background in law, technology, and economics to consider the interface between law and technology and the role of regulation in high-tech industries.

He is Director of Law & Economics Programs at the International Center for Law & Economics (ICLE), a think tank based in Portland, Oregon, where he directs its law and economics-focused research program and helps to translate academic research into applied policy issues. His work has been cited by the Federal Communications Commission (FCC), FTC, federal district and circuit court judges, and U.S. senators, and he has spoken or testified before the committees of the U.S. Senate and House of Representatives, FCC, FTC, the U.S. Army’s 7th Signal Command, and German and Colombian competition regulators.

From The Regulatory Review:

Justin (Gus) Hurwitz, CTIC Senior Fellow and Academic Director Justin (Gus) Hurwitz, CTIC Senior Fellow and Academic DirectorThe Federal Trade Commission (FTC) recently announced proposed changes to Hart-Scott-Rodino (HSR) premerger notification form. This proposal, alongside proposed changes to federal merger guidelines, is part of the Biden Administration’s more aggressive approach to U.S. merger law. Although the merger guideline revisions are receiving most of the attention, the proposed HSR premerger notification form revisions could well have the more substantial lasting impacts.

The premerger notification form is part of the premerger review process established by the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Under this process, large mergers must be reported at least 30 days prior to closing. This allows the antitrust agencies time to determine whether further scrutiny of a transaction is warranted. If the agencies are concerned that a proposed merger might violate the antitrust laws, they can issue a request for additional information about the merger, called a second request, and get an additional 30 days to decide whether to challenge it.

The HSR premerger notification requirements address a basic problem of antitrust law: You cannot “unscramble an egg.” Once a merger is finalized, businesses begin intermingling their operations, personnel, finances, business plans, trade secrets, and intellectual property. The premerger notification process allows the antitrust agencies to pause pending mergers to allow for investigation of their potential competitive effects. Importantly, the premerger notification process was intended not to impede or substantially burden mergers. It was also designed not to entail the creation of new information nor to create any routine delays in the consummation of deals.

The Regulatory Review is a daily online publication that provides accessible coverage of regulatory policymaking and enforcement issues across a full range of regulatory topics and from a variety of perspectives.

Launched in 2009 and operating under the guidance of Cary Coglianese, Edward B. Shils Professor of Law and Professor of Political Science, The Review is edited by students at Penn Carey Law. It is part of the overarching teaching, research, and outreach mission of the Penn Program on Regulation (PPR), which draws together more than 60 faculty from across the University of Pennsylvania.

Read Hurwitz’ full article at The Regulatory Review.