The Federal Trade Commission’s (FTC's) antitrust rule requiring parties to submit additional information to regulators ahead of a planned merger was tossed by a Federal judge Thursday.
The agency’s changes to the Hart-Scott-Rodino (HSR) form were proposed in 2023, finalized in October 2024 and went into effect in February 2025. Though Judge Jeremy Kernodle, of the U.S. District Court for the Eastern District of Texas, ordered the rule vacated Feb. 12, he also stayed the ordered rollback by seven days to give the FTC time to seek an emergency appeal from the Fifth Circuit.
Citing the increasing volume and complexity of dealmaking, the FTC’s rule expanded the amount of information merging companies are required to compile and submit before a merger. By the agency’s own estimates included in the final rule, the change increased companies’ average preparation burdens from 37 hours per filing to 105 hours.
The U.S. Chamber of Commerce filed a legal challenge to the rule in January 2025, alleging that the FTC had exceeded its statutory authority and that its rulemaking was arbitrary and capricious. The agency, under the Trump administration, opposed those allegations and challenged the plaintiffs’ standing.
Kernodle sided with the U.S. Chamber of Commerce and its co-plaintiffs across the board. He agreed with the associations that the FTC had not shown the rule’s “significant and widespread costs” outweighed the benefits.
“Though the FTC asserts that the Rule will detect illegal mergers and save agency resources, the FTC fails to substantiate these assertions,” the judge wrote in his memorandum opinion and order. “The Final Rule is therefore not ‘necessary and appropriate,’ and the statute ‘does not authorize [the FTC] to promulgate [the Final Rule].’”
The FTC’s failure to consider the rule’s costs against its benefits similarly makes it arbitrary and capricious, Kernodle added.
The U.S. Chamber of Commerce, following Thursday’s ruling, said it is “pleased with the court’s decision today rejecting the Biden Administration’s onerous merger tax.”
The decision is also likely to be appreciated by the hospital industry. Though it declined to comment on Thursday’s ruling, the American Hospital Association (AHA) had previously filed public comments during rulemaking that described the additional information requests as unnecessary and a diversion of resources from patient care.
“The agency already has more than enough information about hospital transactions, and it has shown no hesitation in challenging them,” Chad Golder, the AHA’s general counsel and secretary, had said at the time. “The final rule will just require hospitals to divert time and resources away from patient care towards needless compliance costs.”
A notice on its “Premerger Notification Program” webpage acknowledges the federal district court’s vacatur and affirms that any filers submitting from now to Feb. 19 should still use the newer HSR form.
“We will provide further updates soon,” the notice reads.
In an emailed response to a request for comment, FTC Office of Public Affairs Director Joseph Simonson told Fierce Healthcare "We are reviewing the ruling and weighing our options. The Chamber of Commerce is a left-wing, open borders supporting activist group."
Ed Schwartz, a partner in the antitrust and competition group at law firm Reed Smith, told Fierce Healthcare that an appeal from the administration “is certainly likely” but that, “given the Fifth Circuit’s historic skepticism about agencies’ exercise of their rulemaking authority, I would assume that the court is more likely than not to affirm the district court’s decision.”
Should that be the case, Schwartz said he expects the administration to “go back to the drawing board” to create a new version of the rule that would require some of the newer HSR form’s additional information, but with a lighter overall burden on filing parties.
“That would certainly be welcomed by companies planning large transactions in the future,” he said. “And, given both the substantial merger activity in healthcare, and the FTC’s focus on the healthcare industry, any rollback in that burden should come as a particularly welcome development.”
Brian McCalmon, who is part of the antitrust team at law firm Vedder (formerly Vedder Price), noted that the expanded HSR form didn’t have items tied to specific industries, but that “the elimination of the new form’s requirement to describe certain vertical relationships between the parties or their competitors may mean less upfront disclosure in mergers of hospitals and provider groups."
“The new form also requires acquired parties to detail relevant prior acquisition history, whereas the old form required this only of the acquirer. Eliminating this requirement for the target in a merger could mean less initial disclosure in historically acquisitive industries like healthcare,” he said.
McCalmon also cautioned that the FTC still retains its ability to request parties voluntarily provide more information after they’ve filed their premerger form or to issue a second request that would pause a merger until the conclusion of an antitrust investigation.
“And the antitrust agencies have a very significant breadth and depth of experience with mergers in the healthcare industry, so it’s unlikely that reversion to the old form will significantly hinder their ability or incentive to investigate,” he said.
Editor's note: This story has been updated with comment from the FTC.