FTC and DOJ Release HSR Annual Report for Fiscal Year 2012 | Practical Law

FTC and DOJ Release HSR Annual Report for Fiscal Year 2012 | Practical Law

The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) recently released their Hart-Scott-Rodino Annual Report to Congress required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) summarizing the agencies' merger enforcement efforts and providing information regarding the premerger notification program for fiscal year 2012.

FTC and DOJ Release HSR Annual Report for Fiscal Year 2012

Practical Law Legal Update 1-527-1825 (Approx. 4 pages)

FTC and DOJ Release HSR Annual Report for Fiscal Year 2012

by PLC Antitrust
Published on 30 Apr 2013 • USA (National/Federal)
The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) recently released their Hart-Scott-Rodino Annual Report to Congress required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) summarizing the agencies' merger enforcement efforts and providing information regarding the premerger notification program for fiscal year 2012.
The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) recently submitted to Congress their Hart-Scott-Rodino Annual Report (HSR Report) for FY 2012 (October 1, 2011 through September 30, 2012) required under the HSR Act. The HSR Report summarizes the agencies' efforts to identify and investigate transactions that potentially raise antitrust concerns. It provides statistics about both the HSR premerger notification program and the agencies' merger enforcement activity.
The HSR Report contains statistics regarding filings submitted under the HSR program and the agencies' requests for clearance to investigate transactions, the issuance of Second Requests and enforcement activity. Unless otherwise specified, the statistics set out in this Update include only transactions that were correctly reported and do not include transactions for which filings were rejected for any reason by the FTC's Premerger Notification Office.

HSR Filings

The HSR Report states that in FY 2012:
  • 2,829 total HSR filings were received (whether correctly made or not), an almost 2% decrease from FY 2011.
  • 1,429 HSR transactions were reported, a 1.4% decrease from FY 2011.
  • The cumulative dollar value of reported transactions was $921 billion, a 6% decrease from FY 2011.
  • Early termination of the HSR waiting period was:
    • requested in 78% of reported transactions, down from 82% in FY 2011; and
    • granted 82% of the time it was requested in those transactions, up from 77% in FY 2011.

Civil Penalties

The FTC and DOJ brought two actions against parties who failed to make HSR filings required under the HSR Act. These cases resulted in aggregate civil penalties of approximately $1.4 million.

Agency Clearance

The HSR Report states that clearance to investigate was granted to the agencies in 14.7% of reported transactions in FY 2012 (206 transactions). In FY 2011, clearance was granted in 18% of reported transactions (257 transactions).
In FY 2012, clearance was granted:
  • Most frequently in transactions valued at greater than $1 billion dollars, or 30% of the time, as was also the case in FY 2011.
  • To the FTC in 135 transactions (66% of transactions that obtained clearance).
  • To the DOJ in 71 transactions (34% of transactions that obtained clearance).
For more information on how the agencies obtain clearance see Practice Note, Hart-Scott-Rodino Act: Overview: Allocation of Cases Between the FTC and DOJ.

Second Request Issuance

In FY 2012, 49 transactions investigated resulted in a Second Request (3.5% of reported transactions). In FY 2011, the percentage of Second Requests issued was higher (3.9%), as was the number of investigations (55). The division of Second Requests between the agencies in FY 2012 was as follows:
  • The DOJ issued 29 Second Requests (59% of those issued).
  • The FTC issued 20 Second Requests (41% of those issued).

Merger Enforcement

The HSR Report also contains information regarding the agencies' merger enforcement statistics. Together, the agencies brought enforcement actions in just over 3% of reported transactions in FY 2012, totaling 44 transactions.

FTC Merger Enforcement

The FTC challenged 25 transactions that it concluded might have substantially lessened competition, resulting in:
  • 15 consent decrees, with one still pending.
  • Three cases in which administrative complaints were issued, including two in which motions for preliminary injunctions were filed in federal court.
  • Seven transactions that were abandoned or restructured.
For summaries of these enforcement actions, see What's Market, Federal Merger Enforcement Actions.
FTC challenges were brought in a variety of industries, including:
  • Pharmaceuticals.
  • Hospitals and healthcare.
  • Supermarkets.
  • Desktop hard drives.
  • Natural gas.

DOJ Merger Enforcement

The DOJ challenged 19 transactions that led to:
  • Eight merger challenges brought in federal district court, all resulting in consent decrees, including one dismissal after the parties abandoned the transaction.
  • Six abandoned transactions.
  • Two restructured transactions.
  • Three transactions in which the parties changed their conduct to avoid competitive problems.
For summaries of these enforcement actions, see What's Market, Federal Merger Enforcement Actions.
The DOJ challenged transactions in several industries, including:
  • Sliced bread.
  • Health insurance.
  • Wholesale electricity.
  • Stock exchange operators.
  • Parking garages.
The DOJ investigated one bank merger and required divestiture prior to consummation in First Niagara Bank N.A.'s acquisition of HSBC Bank USA N.A.