During fiscal year 1998, Commission investigations resulted in the collection of a $500,000 civil penalty for one violation of the Act.(5)
In addition to the Commission's and the Antitrust Division's reviewing a record number of filings in fiscal year 1998, the Commission's Premerger Notification Office responded to an estimated 41,000 telephone calls seeking information concerning reportability of transactions under the HSR Act and the details involved in completing and filing premerger forms. To improve the information and notification processes, the Commission added an automated menu telephone answering system and expanded its premerger website to include the publication of all formal interpretations and the notification of each grant of early termination.
Despite the increased activity, the agencies continued to work to minimize the enforcement burden on business. While the number of merger investigations rose, the percentage of requests for additional information from merging parties ("second requests") declined and the percentage of early termination requests granted increased.(6)
BACKGROUND
Section 201 of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. No. 94-435, amended the Clayton Act by adding a new Section 7A, 15 U.S.C. § 18a ("the Act"). Subsection (j) of Section 7A provides:
Beginning not later than January 1, 1978, the Federal Trade Commission, with the concurrence of the Assistant Attorney General, shall annually report to the Congress on the operation of this section. Such report shall include an assessment of the effects of this section, of the effects, purpose, and the need for any rules promulgated pursuant thereto, and any recommendations for revisions of this section.
This is the twenty-first annual report to Congress pursuant to this provision. It covers October 1997 through September 1998.
In general, the Act requires that certain proposed acquisitions of stock or assets must be reported to the Federal Trade Commission and the Antitrust Division of the Department of Justice prior to consummation. The parties must then wait a specified period, usually thirty days (fifteen days in the case of a cash tender offer or a bankruptcy sale), before they may complete the transaction. Whether a particular acquisition is subject to these requirements depends upon the value of the acquisition and the size of the parties, as measured by their sales and assets. Small acquisitions, acquisitions involving small parties and other classes of acquisitions that are less likely to raise antitrust concerns are excluded from the Act's coverage.
The primary purpose of the statutory scheme, as the legislative history makes clear, is to provide the antitrust enforcement agencies with the opportunity to review mergers and acquisitions before they occur. The premerger notification program, with its filing and waiting period requirements, provides the agencies with both the time and the information necessary to conduct this antitrust review. Much of the information needed for a preliminary antitrust evaluation is included in the notification filed with the agencies by the parties to proposed transactions and thus is immediately available for review during the waiting period.
If either agency determines during the waiting period that further inquiry is necessary, it is authorized by Section 7A(e) of the Clayton Act to request additional information or documentary materials from either or both of the parties to a reported transaction (a "second request").
