HSR Civil Penalty Skyrockets

Two recent events make it clear that the cost of violating HSR is going up...a lot.

HSR refers to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Under HSR, parties to mergers and other acquisitions (equity or assets) meeting certain jurisdictional tests and not otherwise exempted must file notification with the Federal Trade Commission (FTC) and the Department of Justice (DOJ), and then wait a specified period of time (normally 30 calendar days), before closing on that transaction. Those Federal antitrust agencies use that waiting period to determine whether to challenge the pending transaction on substantive antitrust grounds.

Although the agencies often forgo monetary civil penalties in the case of a first-time, inadvertent HSR violation, the agencies very well may seek a stiff penalty in the case of a subsequent violation.