Speedbump or Roadblock?: Complaint Challenges New Hart-Scott-Rodino Rules

The pending overhaul of the Hart-Scott-Rodino (HSR) rules faces a new challenge. Published in the Federal Register in November, the final HSR modifications were set to become effective on February 10, but late last week the U.S. Chamber of Commerce, a local Chamber chapter, the Business Roundtable, and the American Investment Counsel filed a complaint seeking to block their implementation. While the complaint does not seek a temporary restraining order or a preliminary injunction, the case further highlights the expanded regulations and additional burden the agencies are seeking to impose on merging parties, and places a spotlight on the issue as the Trump Administration prepares to take control of the antitrust agencies.

As background, the FTC released proposed modifications to the HSR rules in July 2023 that were intended to close “informational gaps” in the merger review process, but were both significant and onerous. The FTC completed a notice and comment rulemaking process, with the U.S. Chamber, Business Roundtable, and American Investment Counsel submitting comments, along with several hundred others. A modified—and reasonably less onerous—set of rule changes were released in November 2024 and approved with a 5-0 vote by the FTC Commissioners, including both Republican Commissioners Ferguson and Holyoak. The revisions to the rules, and the related reductions in burden, however, were not enough for plaintiffs.

Through the lawsuit, the plaintiffs seek declaratory and injunctive relief, alleging violations of the Administrative Procedure Act. While the HSR Act authorizes the FTC to specify the content of an HSR premerger notification form, the Chamber argues there are significant limits on that grant of authority. In particular, the HSR Act authorizes the FTC to require information that is “necessary and appropriate” to determine if a proposed acquisition may violate the antitrust laws. The thrust of plaintiffs’ claims are that the revisions do not satisfy that standard because: (i) the FTC has not justified the departure from the status quo, (ii) the FTC lacks a reasoned explanation for rejecting less burdensome alternatives, and (iii) the FTC has failed to explain why the benefits outweigh the costs (and alleges that they, in fact, do not).

To support its arguments, plaintiffs cite to the FTC’s own estimate that the rule changes will “more than quadruple” the average time and expense of preparing an HSR filing for thousands of reportable transactions, imposing an estimated $200-$250 million in additional legal costs on businesses. They also point to the fact that the rules changes apply to every new transaction, rather than only those that are likely to raise competitive concerns. Plaintiffs note that there are already processes for requesting further information if—in certain transactions—the information in the HSR form is inadequate to inform the agencies’ review, including voluntary access letters, communications with customers and competitors, civil investigative demands, and the more fulsome Second Request process.

The complaint also alleges that the FTC has not shown why the current HSR regulations are inadequate (with only 2-3% of notified transactions receiving Second Requests), or why a break from the status quo is necessary. In particular, plaintiffs noted that the FTC has not identified a single transaction that slipped through the cracks and consummated when it should not have been, such that the new information required by the updated rules is necessary to remedy that issue. Finally, plaintiffs allege that the FTC has exceeded its statutory authority, requesting information beyond the scope of the transaction being notified, and seeking information that may require filing parties to submit subjective—and potentially privileged—legal arguments to the agencies.

While we expect that any litigation will take considerable time to play out, the case thrusts the HSR revisions back into the spotlight during the Presidential transition process. Given the Trump Administration’s stated focus on efficiency and reducing regulations, it is unclear whether this lawsuit will be a mere speedbump for the rule changes or may ultimately be a roadblock to their implementation.