Biden FTC’s Deal Program Overhaul Hit With US Chamber Lawsuit

Business groups led by the US Chamber of Commerce sued the Federal Trade Commission to block a rule that will require companies seeking mergers and acquisitions to share substantially more information with US antitrust agencies.

The powerful lobbying groups brought the lawsuit Jan. 10 in the US District Court for the Eastern District of Texas, just weeks before the regulation is set to go into effect and as the FTC gets ready to undergo a leadership shakeup.

The regulation goes beyond the FTC’s authority, the groups argued, asking the court to prevent it from taking effect. The FTC declined to comment.

The FTC rule, approved in a bipartisan 5-0 vote in October, came as part of a broader push inside the Biden administration to more vigorously scrutinize corporate consolidation across industries.

It garnered votes from the commission’s two Republicans, including Andrew Ferguson, whom President-elect Donald Trump has tapped to replace current Chair Lina Khan.

Merger Notification Program

The rule updates a program created in the 1970s with the enactment of the Hart-Scott-Rodino Act that requires proposed deals of a certain size to submit to an initial 30-day antitrust review.

The deal threshold was increased to $126.4 million from $119.5 million under guidance the FTC released Jan. 10.

Khan and other rule proponents have argued the decades-old disclosure requirements proved insufficient for today’s economy.

The updated requirements, set to go into effect Feb. 10, will make companies share more information on areas such as overlapping business lines, ownership structure, and a deal’s rationale, among other things.

Complying is expected to eat up more time and costs while placing greater burdens on industries like private equity.

Industry Pushback

The US Chamber said in its lawsuit that the “dramatic expansion” exceeds constraints in the HSR Act limiting what information the FTC can demand and violates a prohibition on “arbitrary and capricious” agency decisions.

Thousands of companies notify US antitrust agencies of pending deals each year, with just a small sliver being exposed to more full-fledged investigations.

There’s no “good reason” for adding substantial burdens on all merging companies when only a small fraction are annually subject to extensive scrutiny, the complaint said.

The US Chamber brought the case alongside the Business Roundtable, the Longview Chamber of Commerce, and the American Investment Council, a trade group representing private equity and private credit firms.

The lawsuit comes just months after the US Chamber helped lead a successful effort to stall another signature FTC policy initiative—the near-total ban on worker noncompete agreements.

Ferguson opposed the noncompete rule, but he voted with the Democratic majority to update the HSR program, calling it a “lawful improvement over the status quo.”

“I believe that it addresses important shortcomings in the current HSR rule, and that it is ‘necessary and appropriate’ to enable the antitrust agencies to determine whether proposed mergers may violate the antitrust laws,” Ferguson said.

The industry plaintifffs are represented by the US Chamber Litigation Center, Sullivan & Cromwell LLP, and Potter Minton PC.

The case is Chamber of Commerce et al v. FTC, E.D. Tex., 6:25-cv-00009, complaint filed 1/10/25.