On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act of 2023, which includes the Merger Filing Fee Modernization Act (the “Filing Fee Act”). For the first time in over 20 years, the Filing Fee Act changes the structure and amount of premerger filing fees under the Hart-Scott-Rodino Antitrust Improvements Act (the “HSR Act”) by introducing a six-tier fee structure.
- Filing fees for small and medium sized transactions are reduced, while fees are increased for larger transactions. The highest tier has been increased from $280,000 to $2.25M for the largest value transactions.
- While the FTC has not yet disclosed when the new filing fees will take effect, instructions likely will be forthcoming in early 2023.
Changes to Filing Fee Structure
The current HSR filing fee structure contains three tiers as follows:
|$45,000||valued at more than $101M but less than $202M|
|$125,000||valued at $202 million or more but is less than $1,009.8M|
|$280,000||valued at $1,009.8M or more|
The new fee structure contains six tiers:
|$30,000||valued at more than $50M (as adjusted) but less than $161.5M (as adjusted)|
|$100,000||valued at $161.5M (as adjusted) or more but is less than $500M (as adjusted)|
|$250,000||valued at $500M (as adjusted) or more but is less than $1B (as adjusted)|
|$400,000||valued at $1B (as adjusted) or more but is less than $2B (as adjusted)|
|$800,000||valued at $2B (as adjusted) or more but is less than $5B (as adjusted)|
|$2,250,000||valued at $5B (as adjusted) or more|
Unlike the prior structure, the new filing fees will be revised annually based on changes to the Consumer Price Index. This is similar to the annual changes to the HSR Act thresholds.
Revised Filing Fees Provide the FTC and DOJ with More Resources to Investigate Allegedly Anticompetitive Behavior
The Filing Fee Act particularly affects higher value transactions above the current $1,009.8M threshold. The Congressional Budget Office has estimated that the increased filing fees could raise an additional $1.4B between 2023-2027. With more funds, the FTC and DOJ will have the ability to significantly improve their investigative toolkit, including increasing the number of agency staff to be able to review more mergers or other antitrust activity, enhancing litigation capabilities and electronic discovery infrastructure, and hiring more economic and industry experts to assist in merger or antitrust litigation.
Foreign Subsidy Disclosures in HSR Act Filings
The Consolidated Appropriations Act also includes a requirement that the FTC and DOJ revise the HSR notification requirements to include information about subsidies received from foreign governments that are considered to raise national security concerns. These new notification requirements will be effective after the FTC and DOJ follow an official rulemaking procedure, which could take several months or more.