HSR '10 Form Changes PRA SS FIN_mtd

Supporting Statement for
Proposed Amendments to Hart-Scott-Rodino Rules and Notification Report Form
16 C.F.R. Parts 801-803
(OMB Control No. 3084-0005)
The Federal Trade Commission (“FTC” or “Commission”) seeks OMB clearance for
proposed revised information collection requirements under its Hart-Scott-Rodino Antitrust
Improvements Act Rules (“HSR Rules”) and corresponding Premerger Notification and Report
Form for Certain Mergers and Acquisitions (“Notification and Report Form” or “Form”).
1. and 2.

Necessity for and Use of the Information Collection

Section 7A of the Clayton Act (“Act”), 15 U.S.C. § 18a, as amended by the Hart-ScottRodino Antitrust Improvements Act of 1976, Pub. L. 94-435, 90 Stat. 1390, requires parties of a
certain size contemplating large acquisitions to file notification with the Federal Trade
Commission and the Assistant Attorney General in charge of the Antitrust Division of the
Department of Justice (“Assistant Attorney General”) and wait a specified time period before
consummating the transaction. Section 7A(d) of the Act states that the Commission, with the
concurrence of the Assistant Attorney General:
shall require that the notification required under subsection (a) [of the Act] be in such
form and contain such documentary material and information relevant to a proposed
acquisition as is necessary and appropriate to enable the Federal Trade Commission and
the Assistant Attorney General to determine whether such acquisitions may, if
consummated, violate the antitrust laws; and . . . prescribe such other rules as may be
necessary and appropriate to carry out the purposes of . . . [the Act].
Pursuant to its rulemaking authority, the Commission promulgated § 803.1(a) of the HSR
Rules, among other rules, designating the Notification and Report Form together with all
documentary attachments, as the notification required by the Act. The information and
documentary material required by the Notification and Report Form provide the Commission
and the Antitrust Division with the opportunity to review mergers and acquisitions and take
appropriate enforcement action before consummation.
The HSR Rules are divided into three parts, which appear at 16 C.F.R. Parts 801, 802,
and 803. Part 801 defines a number of the terms used in the Act and the HSR Rules, and
explains which acquisitions are subject to the reporting and waiting period requirements. Part
802 contains a number of exemptions from these requirements. Part 803 explains the procedures
for complying with the Act. The Notification and Report Form, which is completed by persons
required to file notification, is an appendix to Part 803 of the HSR Rules. Changes of a
substantive nature have been made in the premerger notification rules or the Notification and
Report Form on several occasions.
The Commission is proposing amendments to the HSR Rules, Notification and Report
Form, and associated Instructions in order to streamline the Form and capture new information
that will help the FTC and the Antitrust Division of the Department of Justice conduct their

initial review of a proposed transaction’s competitive impact.
3.

Use of Information Technology

Consistent with the Government Paperwork Elimination Act, Pub. L. No. 105-277, Title
XVII, 112 Stat. 2681-749, the Notification and Report Form is available electronically and
payment may be made by electronic funds transfer. Furthermore, electronic submission of the
Notification and Report Form was introduced in 2006.1
4.

Efforts to Identify Duplication

Most of the information required by the Notification and Report Form is not available
from other government agencies or public sources. Prior to passage of the Act, efforts were
made to obtain information that is necessary for a preliminary antitrust analysis from other
sources but these sources proved to be inadequate for law enforcement purposes. The
information that was available was not the type of information needed nor was it available on a
timely basis. It was the lack of alternative sources or information and the need to receive
information quickly that motivated Congress to enact Section 7A.
5.

Efforts to Minimize Small Organization Burden

The premerger notification program does not affect small businesses or other small
entities. The requirements of the Act do not apply to acquisitions valued at $63.4 million2 or
less. In addition, a firm must have sales or assets of at least $12.7 million to be subject to the
requirements of the Act. A firm with assets of less than $12.7 million would also be subject to
the requirements of the Act, but only if it intends to acquire assets valued at more than $253.7
million or if it is an acquisition target that has been valued at more than $253.7 million.
6.

Consequences to Program if Collection Done Less Frequently

The Act requires parties of a certain size who are contemplating proposed acquisitions of
a specified minimum amount to file a notification report with the Commission and the Antitrust
Division before consummating the transaction. Collection of information on a less frequent
basis would be contrary to the Act since the enforcement agencies must review proposed
acquisitions before they are consummated. Moreover, individual firms, not the enforcement
agencies, control the frequency of filing.

1

71 Fed. Reg. 35,995 (June 23, 2006).

2

The 2000 amendments to Section 7A require the Commission to revise the Act’s jurisdictional and filing fee
thresholds annually, based on the change in gross national product, in accordance with Section 8(a)(5) for each
fiscal year beginning after September 30, 2004. See 15 U.S.C. 18a(a). The current adjusted thresholds appear
at 75 Fed. Reg. 3468 (January 21, 2010). These thresholds became effective on February 22, 2010.

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7.

Circumstances Requiring Collection Inconsistent with Guidelines

The collection of information in the HSR Rules and the Notification and Report Form is
consistent with all applicable guidelines contained in 5 C.F.R. § 1320.5(d)(2).
8.

Public Comments/Consultation outside the Agency

The HSR Rules and the Notification and Report Form are a product of informal
consultations with the affected public to develop a fuller understanding of the issues and
methods of addressing them. In the instant context, in accordance with 5 C.F.R. 1320.8(d), the
FTC is seeking public comment on the proposed collections of information (or proposed
amendments to them). See [GG: fill in NPRM cite once available[.
9.

Payments of Gifts to Respondents

Not applicable
10. and 11.

Assurances of Confidentiality/Matters of a Sensitive Nature

The enforcement agencies are prohibited by Section 7A(h) of the Act from disclosing to
the public information and documentary materials filed under the premerger notification
program “except as may be relevant to an administrative or judicial action or proceeding.” The
Commission has implemented procedures to assure the confidentiality of the submitted
information. Moreover, the Notification and Report Form does not request any information of a
sensitive, personal nature that is commonly considered private.
12.

Estimated Annual Hours Burden: 32,037 hours

The following burden estimates are primarily based on FTC data concerning the number
of HSR filings and staff's informal consultations with leading HSR counsel. Premerger
Notification Office staff canvassed eight practitioners from the private bar to estimate the
projected change in burden due to the proposed amendments to the Form. All are considered
HSR experts and have extensive experience with preparing HSR filings for the types of
transactions that are most likely to be affected by the proposed changes.
Many of the proposed changes would significantly reduce burden for all filers. Others
would increase burden, particularly for acquiring persons that are private equity funds and
master limited partnerships. The consensus of those canvassed was that, on average, burden for
collecting and reporting would decrease approximately five percent. Thus, 37 hours (rounded to
the nearest hour) will be allocated to non-index filings.3 [(Current estimate, 39 hours4) x (1-.05)

3

Id. Clayton Act sections 7A(c)(6) and (c)(8) exempt from the requirements of the premerger notification
program certain transactions that are subject to the approval of other agencies, but only if copies of the
information submitted to these other agencies are also submitted to the FTC and the Assistant Attorney

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= 37.05 hours.]
The proposed Form changes only affect non-index filings which, for FY 2010, the FTC
projects will total 841. Assuming an average of 37 hours per filer, and combining this revised
calculation with the preceding calculations for index filings and estimates of transactions
requiring more precise valuations results in a revised cumulative total of 32,037 hours.5 This is a
decrease of 1,261 hours from the prior estimate of 33,298 hours6 for the current rules. Applying
the revised estimated hours, 32,037, to the previous assumed hourly wage of $460 for executive
and attorney compensation,7 yields $14,737,000 (rounded to the nearest thousand) in labor costs,
a decrease of $580,000 from the prior estimate of $15,317,000.
Associated labor costs: $14,737,020
Using the burden hours estimated above and applying an estimated average of $460/hour
for executive and attorney wages, staff estimates that the total labor cost associated with the
HSR Rules and the Notification and Report Form is approximately $14,737,000 (32,037 hours x
$460/hour).
13.

Estimated Capital/Other Non-Labor Costs Burden

The proposed amendments presumably will impose minimal or no additional capital or
other non-labor costs, as businesses subject to the HSR Rules generally have or obtain necessary
equipment for other business purposes. Staff believes that the above requirements necessitate
ongoing, regular training so that covered entities stay current and have a clear understanding of
federal mandates, but that this would be a small portion of and subsumed within the ordinary
training that employees receive apart from that associated with the information collected under
the HSR Rules and the corresponding Notification and Report Form.

General. Thus, parties must submit copies of these “index” filings, but completing the task requires
significantly less time than non-exempt transactions that require “non-index” filings.
4

Id.

5

This is determined as follows: [(841 non-index filings x 37 hours) + (22 transactions requiring more precise
valuation x 40 hours) + (20 index filings x 2 hours)]
6

The preceding estimate, detailed further at 75 FR 8992 - 8993, was calculated as follows: [(841 non-index
filings x ½ incorporating Item 4(a) and Item 4(b) documents by reference to an Internet link) x (39 hours less
one hour saved this way)] + [(841 non-index filings x ½ at 39 hours)] + (22 transactions requiring more
precise valuation x 40 hours) + (20 index filings x 2 hours)] = 33,298 hours. The reduction within this prior
calculation for time saved when incorporating Item 4(a) and Item 4(b) documents by reference to an Internet
link would be mooted by the proposed changes. The proposals would further reduce time to complete the
Form, and are factored into the estimated five percent reduction stated above.
7

Id.

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14.

Estimated Cost to Federal Government

The total cost to the Commission for the premerger notification program for fiscal year
2009 was approximately $3.1 million. This includes the cost of administering the overall
program, a responsibility with which the Commission is charged under the Act. The costs cover
professional and clerical salaries and expenses for the performance of an initial antitrust review of
the filings submitted to the Commission.
In fiscal year 2009, the Antitrust Division of the U.S. Department of Justice expended
$297,913 in salary and overhead costs in support of the initial processing of premerger
notifications by its Premerger Office. The Department of Justice does not allocate costs of initial
substantive review to the program.
Thus, the total cost to the federal government is approximately $3,397,913.
15.

Program Changes or Adjustments

The proposed changes to the HSR Rules and Notification and Report Form will not affect
the number of estimated filings. Staff estimates that the burden for non-index filings will be
reduced from 39 hours to 37 hours. The proposed Form changes affect only non-index filings
which, for FY 2010, the FTC projects will total 841. Assuming an average of 37 hours per filer,
and combining this revised calculation with the preceding calculations for index filings and
estimates of transactions requiring more precise valuations results in a revised cumulative total of
32,037 hours.8 This is a decrease of 1,261 hours from the prior estimate of 33,298 hours9 for the
current rules.
16.

Statistical Use of Information

Collection of information under the Act is for law enforcement purposes. There are no
plans to publish information collected as a result of the premerger notification program.
17.

Requesting Permission Not to Display Expiration Date for OMB Approval

Not applicable; the OMB control number and expiration date will appear in the upper

8

This is determined as follows: [(841 non-index filings x 37 hours) + (22 transactions requiring more precise
valuation x 40 hours) + (20 index filings x 2 hours)]
9

The preceding estimate, detailed further at 75 FR 8992 - 8993, was calculated as follows: [(841 non-index
filings x ½ incorporating Item 4(a) and Item 4(b) documents by reference to an Internet link) x (39 hours less
one hour saved this way)] + [(841 non-index filings x ½ at 39 hours)] + (22 transactions requiring more
precise valuation x 40 hours) + (20 index filings x 2 hours)] = 33,298 hours. The reduction within this prior
calculation for time saved when incorporating Item 4(a) and Item 4(b) documents by reference to an Internet
link would be mooted by the proposed changes. The proposals would further reduce time to complete the
Form, and are factored into the estimated five percent reduction stated above.

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right-hand corner of page 1 of the Notification and Report Form.
18.

Exceptions to Certification

Not applicable.

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