Federal judge vacates FTC premerger rule — 5 things to know

 The U.S. District Court for the Eastern District of Texas has vacated a final rule from the Federal Trade Commission that expanded premerger notification requirements under the Hart-Scott-Rodino Antitrust Improvements Act, which requires organizations to report large transactions to the FTC and Justice Department for antitrust review.

The rule, finalized in October 2024, increased reporting requirements on the HSR form for companies pursuing certain mergers and acquisitions. 

Five things to know:

1. The court ruled that the FTC exceeded its authority. In a Feb. 12 opinion, Judge Jeremy Kernodle wrote that the rule “exceeds the FTC’s statutory authority because the agency has not shown that the rule’s claimed benefits will ‘reasonably outweigh’ its significant and widespread costs.” He added that the FTC failed to substantiate its assertions that the rule would better detect illegal mergers and conserve agency resources. “The final rule is therefore not ‘necessary and appropriate,’ and the statute ‘does not authorize [the FTC] to promulgate [the final rule],'” he wrote.

2. The rule would have expanded HSR filing requirements. The changes required additional disclosures from merging parties, including more detailed descriptions of business lines, competitive overlaps and certain investor information. The FTC said the updates were intended to reflect shifts in the economy, corporate structures and deal complexity since the HSR Act was enacted nearly five decades ago.

3. The U.S. Chamber of Commerce challenged the rule in 2024. The business group argued that the expanded requirements imposed significant compliance costs on companies without sufficient statutory backing. The lawsuit ultimately led to the Texas court’s decision to vacate the rule.

4. The American Hospital Association opposed the changes. The AHA in August 2025 filed an amicus brief in the case, arguing the FTC’s revisions to the HSR form were “unnecessary and unlawful.” The association previously said the amended rules would require filing parties to submit more information than agencies could feasibly review within the standard 30-day waiting period. Key aspects of the court’s decision — including its rejection of the FTC’s reliance on a study related to hospital mergers — aligned with arguments raised in the AHA’s brief.

5. The FTC defended the rule as a modernization effort. When finalizing the changes, the FTC said the additional information would help the agency and the Justice Department more effectively screen transactions for potential antitrust concerns before they are consummated. The agency also framed the rule as a way to make premerger review more efficient by ensuring regulators had sufficient information at the outset of a deal review.

https://www.beckershospitalreview.com/legal-regulatory-issues/federal-judge-vacates-ftc-premerger-rule-5-things-to-know/