NetChoice’s comments urge the FTC and DOJ to permanently abandon the burdensome requirements of the recently vacated 2024 Updated HSR Form and return the premerger notification process to its original purpose as a streamlined screening mechanism. Instead of introducing new, irrelevant informational demands regarding issues like artificial intelligence use, sovereign wealth funds or defense contracts, the agencies should adopt a simplified, short-form track for the vast majority of transactions that pose no competitive threat. Furthermore, we ask the agencies to eliminate overly broad document collection rules, protect critical exemptions for passive investments and tech “acquihires” and reject proposals requiring new filings for structural remedies, as these regulatory overreaches only serve to chill efficient settlements and penalize the American innovation economy.
NetChoice Comment for the Record on the Request for Public Comment Regarding Making Improvements to the Premerger Notification and Report Form, Federal Trade Commission and US Department of Justice Docket ID: FTC-2026-0298-0001
May 26, 2026
Comment of NetChoice:
NetChoice, a national trade association of online businesses committed to defending free expression and free enterprise, respectfully submits this comment in response to the joint Request for Information issued by the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice (together, the “Agencies”) on March 25, 2026, regarding potential improvements to the Hart-Scott-Rodino (“HSR”) Premerger Notification and Report Form. NetChoice promotes free enterprise and free expression online through advocacy, litigation and regulatory engagement, and our members include many of the most innovative technology companies in the United States.
We appreciate the Agencies’ willingness to undertake this process following the February 12, 2026, decision of the United States District Court for the Eastern District of Texas in Chamber of Commerce v. FTC, which vacated the 2024 Final Rule that produced the Updated Form (Chamber of Commerce v. FTC, No. 6:25-cv-9, 2026 WL 402498 (E.D. Tex. Feb. 12, 2026) (granting summary judgment to plaintiffs and vacating the 2024 Rule on the grounds that the FTC “has not shown that the Rule’s claimed benefits will ‘reasonably outweigh’ its significant and widespread costs” and that the rule was arbitrary and capricious because the FTC failed to consider whether its benefits “bear a rational relationship” to its costs and failed to adequately explain its rejection of less costly alternatives)). As NetChoice explained in our September 27, 2023, comment opposing the rulemaking that ultimately produced the now-vacated Updated Form (See Comment of NetChoice, Proposed Changes to HSR Premerger Notification Form (Sept. 27, 2023), available at https://netchoice.org/wp-content/uploads/2023/09/Comment-of-NetChoice_HSR.pdf (hereinafter “NetChoice 2023 Comment”)), the expansion of the HSR Form was, and remains, ill-suited to the statutory text of the HSR Act, the longstanding tradition of depoliticized U.S. antitrust enforcement, and the realities of the modern American innovation economy. Judge Kernodle’s vacatur order—which concluded that the FTC failed to show that the Rule’s benefits “reasonably outweigh” its costs and that the agency had not adequately considered less costly alternatives such as targeted voluntary submissions or more focused Second Requests—substantially vindicates the concerns NetChoice and others raised during the 2023 comment period (See Gibson Dunn, Federal Court Vacates FTC’s 2024 HSR Premerger Notification Rule (Feb. 13, 2026) https://www.gibsondunn.com/federal-court-vacates-ftc-2024-hsr-premerger-notification-rule/ (“Judge Kernodle also ruled that the 2024 Rule is arbitrary and capricious because the FTC failed to consider whether the 2024 Rule’s benefits ‘bear a rational relationship’ to its costs and the FTC ‘did not adequately explain its rejection of less costly and burdensome alternatives,’ such as targeted voluntary submissions or more focused Second Requests.”)).
NetChoice respectfully urges the Agencies to use this opportunity not merely to refine the Updated Form at the margins, but to recalibrate the HSR notification process toward its original purpose: a streamlined screening mechanism that allows the Agencies to identify the small fraction of transactions warranting deeper scrutiny, without imposing disproportionate compliance burdens on the more than 98% of reportable transactions that raise no plausible competitive concern. If the Agencies retain or reintroduce expanded requirements, they should identify the specific statutory authority for each requirement, quantify the marginal benefit of each category of information, assess the burden on different categories of filers and explain why narrower alternatives—including short-form notifications, voluntary access letters and targeted Second Requests—wouldn’t be enough.
Our comment below addresses the RFI’s specific questions and identifies the requirements of the Updated Form that should be eliminated, narrowed or substantially clarified.
Executive Summary
NetChoice’s comment makes five principal points:
- First, the Updated Form’s most burdensome requirements—including the Supply Relationships Description, the expanded document-collection obligations tied to “supervisory deal team leads,” the expanded prior-acquisition disclosures and the open-ended narrative descriptions of overlaps—impose costs that the district court found the FTC failed to justify under the HSR Act’s “necessary and appropriate” standard. These requirements should be eliminated or sharply narrowed, particularly for transactions that lack a horizontal competitive overlap.
- Second, the Agencies should adopt a simplified, short-form notification track for categories of transactions that are presumptively unlikely to raise competitive concerns, mirroring the European Commission’s 2023 simplification reforms (Commission Notice on a simplified treatment for certain concentrations under Council Regulation (EC) No 139/2004, 2023 O.J. (C 366) 1; see also Alex Bagley, Lawyers welcome “major reform” of EU’s simplified merger regime, Glob. Competition Rev. (Apr. 20, 2023)) and the practice in numerous other jurisdictions. The current one-size-fits-all approach is inconsistent with Congress’s direction that HSR review “neither deter nor impede consummation of the vast majority of mergers and acquisitions” (S. Rep. No. 94-803, pt. 1, at 65-66 (1976) (Congress sought a system that would “neither deter nor impede consummation of the vast majority of mergers and acquisitions”)).
- Third, the Agencies should resist the temptation to layer additional informational requirements—whether relating to artificial intelligence, sovereign wealth funds, defense procurement or real estate—onto the standard HSR Form. To the extent such information is genuinely necessary for review of a particular subset of transactions, it should be requested through Second Requests, voluntary access letters or narrowly targeted supplemental filings, not through the universal screening form.
- Fourth, any modifications to the rules governing the “solely for the purpose of investment” exemption, non-traditional transaction structures (such as so-called “acquihires” and licensing arrangements) and the real estate and REIT exemptions must proceed by careful, transparent rulemaking with adequate notice, robust economic analysis and faithful attention to the statutory text. Sub-regulatory “clarifications” that effectively expand the universe of reportable transactions exceed the Agencies’ statutory authority.
- Fifth, proposals to require new or supplemental HSR filings whenever parties propose structural remedies during an investigation or enforcement action would chill efficient settlements, undermine the resolution of meritorious cases and effectively allow the Agencies to extend statutory waiting periods unilaterally. NetChoice opposes any such requirement.
We elaborate on each of these points below, addressing the RFI’s numbered questions where appropriate.
I. The Updated Form Imposed Substantial Burdens that Outweighed Its Probative Value (RFI Questions 1, 3, 4, 8)
A. The FTC’s Own Burden Estimates, As Found by the District Court, Confirm that Costs were not Justified by Benefits
When the Agencies adopted the Updated Form in October 2024, the Commission itself estimated that the new requirements would increase the average time required to complete an HSR filing from approximately 37 hours to 105 hours—nearly a tripling of preparation time—with the highest burden falling on transactions involving competitive overlaps or supply relationships, where the FTC projected 120 or more hours per filing (See, e.g., Gibson Dunn, Federal Court Vacates FTC’s 2024 HSR Premerger Notification Rule (Feb. 13, 2026), https://www.gibsondunn.com/federal-court-vacates-ftc-2024-hsr-premerger-notification-rule/ (noting that the FTC “acknowledged that the 2024 Rule would nearly triple filing time—from 37 to 105 hours”); see Transaction Advisors, New HSR Rules Hit Corporate M&A Teams, https://www.transactionadvisors.com/courses/hsr (“Estimates range from 3-5 weeks of preparation time, compared to the previous 5-10 business days. The FTC estimates an average increase of 68 hours per filing, with the highest burden for acquisitions with overlapping products, services, or supply relationships (120+ hours).”)). Practitioners and trade associations reported that these official estimates understated the true compliance burden in many cases, particularly for first-time filers and smaller transactions (Reed Smith, Federal Court Vacates HSR Overhaul (Feb. 16, 2026) https://www.reedsmith.com/articles/federal-court-vacates-hsr-overhaul/ (“The FTC estimated the new form would take an average of 105 hours for parties and their counsel to complete—nearly triple the original form’s 37 hours of average preparation time. The FTC likewise estimated that the cost to complete the new form would triple. Business groups estimated the true burden was even higher in many instances.”); Epstein Becker Green, District Court Vacates Rule Substantially Revising HSR Premerger Notification Form (Feb. 19, 2026) https://www.ebglaw.com/insights/publications/district-court-vacates-rule-substantially-revising-hsr-premerger notification-form (observing that the rule “by the FTC’s own account, more than triples the time and expense of filing”)).
Crucially, as Judge Kernodle noted—after full briefing on cross-motions for summary judgment—in the year that the Updated Form was in effect the FTC had not justified those costs. The court held that the agency “has not shown that the Rule’s claimed benefits will ‘reasonably outweigh’ its significant and widespread costs,” and that the rule was therefore both in excess of statutory authority and arbitrary and capricious under the Administrative Procedure Act (Chamber of Commerce v. FTC, supra.).
The court also specifically faulted the FTC for failing to “‘adequately explain its rejection of less costly and burdensome alternatives,’ such as targeted voluntary submissions or more focused Second Requests” (See Gibson Dunn, supra.). The court’s analysis tracks closely the concerns NetChoice raised in 2023: that the marginal informational benefit of the Updated Form’s expanded requirements could not justify the universal cost imposed on the more than 98% of reportable transactions that pose no plausible competitive concern.
The FTC has appealed the vacatur, and on March 19, 2026, the Fifth Circuit denied the Commission’s motion for a stay pending appeal. As a result, filings are now once again being made under the pre-2025 form. The RFI represents an appropriate moment for the Agencies to reflect on which features of the Updated Form, if any, satisfy the “necessary and appropriate” standard the district court identified.
B. Specific Requirements That Should be Eliminated or Narrowed (RFI Question 3)
Several specific requirements of the Updated Form should be eliminated or substantially narrowed because their compliance burden is disproportionate to their probative value:
- The Supply Relationships Description. The Supply Relationships Description required filers to produce detailed narrative descriptions of existing or potential vertical relationships, including sales and purchases between the filing persons and third parties using the filer’s products to compete with the other filer. As NetChoice explained in 2023, this requirement is fundamentally misconceived. Both the case law and the economic literature establish that the overwhelming majority of vertical mergers are procompetitive or competitively neutral (Koren W. Wong-Ervin, Antitrust Analysis of Vertical Mergers: Recent Developments and Economic Teachings, Antitrust Source (Feb. 2019) https://www.americanbar.org/content/dam/aba/publications/antitrust/magazine/archived/2019/february/anti trust-analysis-vertical-mergers.pdf (“The generally accepted belief underlying modern antitrust analysis of vertical mergers […] has been that they are generally procompetitive or neutral. This belief is supported by a significant body of empirical evidence.”)). The Agencies’ recent litigation record in vertical cases—losses in Meta/Within, Microsoft/Activision, Booz Allen/EverWatch, UnitedHealth/Change Healthcare and AT&T/Time Warner (FTC v. Microsoft Corp., 681 F. Supp. 3d 1069 (N.D. Cal. 2023), aff’d, 97 F.4th 631 (9th Cir. 2024); FTC v. Meta Platforms, Inc., No. 5:22-cv-04325 (N.D. Cal. Feb. 3, 2023); United States v. Booz Allen Hamilton Holding Corp., No. 22-cv-1603 (D. Md. Oct. 17, 2022); United States v. UnitedHealth Group Inc., 630 F. Supp. 3d 118 (D.D.C. 2022); United States v. AT&T Inc., 916 F.3d 1029 (D.C. Cir. 2019))—confirms that vertical mergers are appropriately addressed, if at all, through targeted post-filing investigation rather than universal upfront disclosure. The Supply Relationships Description should be eliminated. To the extent the Agencies wish to understand vertical relationships in a specific transaction, a Second Request remains available.
- The “Supervisory Deal Team Lead” Document Collection. The Updated Form’s requirement that filers collect responsive documents not only from officers and directors but also from a new category of “supervisory deal team leads”—defined as “the individual who has primary responsibility for supervising the strategic assessment of the deal, and who would not otherwise qualify as a director or officer”—introduced substantial compliance burdens and legal uncertainty. Practitioners writing in the ABA’s Business Law Today reported that compliance required filers to put new internal processes in place, including notifying potential SDTLs that their email would be produced and creating “deal-specific mailbox[es]” to track responsive material (See Matt Bester & Paul Covaleski, A Practical Guide to the New HSR Form for In-House Counsel, Business Law Today (Mar. 27, 2025), https://www.americanbar.org/groups/business_law/resources/business-law-today/2025-march/practical-guide -new-hsr-form-house-counsel/ (describing the SDTL designation as requiring new internal processes, including creation of “deal-specific mailbox[es]” and informing stakeholders that emails sent to the SDTL will be produced); New HSR Rules Hit Corporate M&A Teams, Transaction Advisors, supra (noting that filers are “concerned about the somewhat vague, ambiguous, and subjective requirements, given signatures under penalty of perjury will be required”)). “Officers” and “directors” are well-defined under state corporate law; “supervisory deal team lead” is not. This requirement disproportionately burdens smaller companies that do not maintain dedicated M&A teams. The Agencies should return to the well-understood officer-and-director standard.
- The Expanded Document and Draft-Document Production. The Updated Form’s treatment of draft transaction-related documents introduced significant ambiguity. Although the Statement of Basis and Purpose nominally limited draft production to documents shared with the board (or similar body), that limitation functioned (as practitioners observed) as “the exception that swallows the rule”—in the great majority of transactions, a CEO, founder, or other executive also sits on the board (See Akin, New HSR Requirements Will Dramatically Increase the Burden on Filers (Oct. 30, 2024), https://www.akingump.com/en/insights/alerts/new-hsr-requirements-will-dramatically-increase-the-burden-on -filers (explaining that the new rule’s statement of basis and purpose treats any document “shared with any member of the board of directors (or similar body)” as not a draft, which Akin describes as potentially “the exception that swallows the rule”)). The Agencies should restore the longstanding pre-2025 rule under which draft transaction-related documents are not generally producible, with production limited to the final version of responsive documents and to drafts formally circulated to the full board for deliberative purposes.
- The Expanded Prior Acquisitions Disclosure. The Updated Form’s requirement that filers disclose prior acquisitions over the preceding ten years—including non-reportable transactions and transactions in adjacent product or geographic markets—imposes substantial archival research burdens, particularly on private equity sponsors and serial acquirers in fragmented industries. For the great majority of transactions, prior non-reportable acquisitions have no bearing on the competitive analysis of the current transaction. This disclosure should be limited to reportable prior acquisitions in markets with a horizontal overlap to the current transaction.
- The Officers, Directors and Board Observers Section. The Updated Form’s requirement that filers disclose other board service by their officers and directors bears no relationship to Section 7 of the Clayton Act. Section 8 interlocking-directorate concerns can be addressed through narrower disclosure limited to other for-profit boards in the same or related industries. The current scope sweeps in vast quantities of irrelevant information and raises legitimate associational and privacy concerns. It should be eliminated as to non-commercial board service and narrowed as to commercial boards.
- The Minority Investor and “Influence” Disclosures. The Updated Form’s requirement that filers disclose entities that may “exert influence” over them—including limited partner investors, board observers and non-voting security holders—without any tether to competitive overlap is overbroad. As applied to private equity sponsors and other institutional investors that finance multiple companies to diversify risk, the requirement effectively penalizes diversified investment with disclosure burdens unrelated to any plausible competition concern. The disclosure should be limited to investors with formal governance rights and should be triggered only where a competitive overlap exists.
C. Best Practices for the Overlap and Supply Relationships Descriptions (RFI Question 8)
Practitioner commentary during the year the Updated Form was in effect observed that the deal-specific requirements were “sufficiently numerous that it is fair to say there are effectively now two different HSR forms: one for deals with overlaps and one for deals without them” (See Matthew J. Bester & Paul Covaleski, A Practical Guide to the New HSR Form for In-House Counsel, Business Law. Today, (Mar. 27, 2025), https://www.americanbar.org/groups/business_law/resources/business-law-today/2025-march/practical-guide -new-hsr-form-house-counsel/ (“These deal-specific requirements are sufficiently numerous that it is fair to say there are effectively now two different HSR forms: one for deals with overlaps and one for deals without them.”)). By demanding extensive information about vertical relationships, the Updated Form raised the cost of pro-competitive vertical mergers, created uncertainty as to their legality (in contravention of the case law), and perhaps discouraged such transactions altogether. In short, the Updated Form attempted to fix what isn’t broken: vertical mergers. Vertical mergers are pro-competitive. And where the agencies have sought to challenge these mergers as anti-competitive, the courts rebuffed those challenges.
II. The Agencies Should Adopt a Simplified Notification Track for Non-Problematic Transactions (RFI Questions 5, 7)
As NetChoice observed in 2023, one of the most striking features of the rulemaking that produced the Updated Form was the Agencies’ refusal to adopt any form of simplified notification procedure for transactions presumptively unlikely to raise competitive concerns. The European Commission, by contrast, adopted in 2023 a substantial expansion of its simplified merger procedure precisely in order to reduce burdens on unproblematic transactions (Commission Notice on a simplified treatment for certain concentrations under Council Regulation (EC) No 139/2004, 2023 O.J. (C 366) 1; see also Alex Bagley, Lawyers welcome “major reform” of EU’s simplified merger regime, Glob. Competition Rev. (Apr. 20, 2023)). Numerous other jurisdictions follow similar models. Judge Kernodle’s opinion specifically faulted the FTC for failing to consider this category of less burdensome alternatives (See Gibson Dunn, supra.).
The Agencies should now correct that imbalance. A short-form HSR notification—requiring only the basic transaction information, the size-of-transaction and size-of-person details and a streamlined certification regarding the absence of horizontal overlap and significant vertical relationships—would be appropriate for the following categories of transactions:
- Transactions in which the parties have no horizontal product or geographic overlap, and no significant vertical supply relationship as defined by clear quantitative thresholds.
- Transactions in which the acquired entity has had no revenue, or revenue below a de minimis threshold, in the United States during the preceding years.
- Transactions in which the acquiring person’s share in any relevant market in which the acquired entity participates does not exceed a presumptively safe threshold.
- Acquisitions by passive financial investors (e.g., index funds, broadly diversified pension funds) that are accompanied by appropriate certifications regarding the absence of any intent or capacity to influence the target’s competitive decision-making, subject to the further discussion of the investment-only exemption below.
- Internal corporate restructurings and other transactions in which beneficial ownership is unchanged or substantially unchanged.
The availability of a short-form track would substantially reduce compliance costs for the great bulk of HSR filings while preserving—indeed, enhancing—the Agencies’ ability to focus their review resources on the small number of transactions that warrant scrutiny. The Agencies should retain the ability, in appropriate cases, to require a full-form filing where the short-form certification appears inadequate.
Materiality and Safe Harbor Thresholds (RFI Question 7). In addition to the short-form track, the Agencies should adopt clear materiality thresholds for several of the Updated Form’s informational requirements. For example, narrative overlap descriptions should not be required where combined revenue in a relevant area is below a certain threshold; prior-acquisition disclosure should be limited to acquisitions exceeding the HSR reporting threshold at the time of the prior transaction; and document collection should be limited to documents prepared by or for officers, directors and a defined set of senior executives identified by formal title rather than by functional role. These thresholds would meaningfully reduce burden without depriving the Agencies of information they actually need.
III. The Agencies Should Reject Proposals to Add New Informational Requirements (RFI Questions 9–13, 16–18)
The RFI signals that the Agencies are considering layering several additional informational requirements onto the HSR Form—including disclosures relating to CFIUS compliance, sovereign wealth funds, Department of War contracts, the “solely for investment” exemption, non-traditional transaction structures, single-family housing acquisitions and the use of artificial intelligence in preparing filings. NetChoice respectfully submits that, as a general matter, the HSR Form is the wrong vehicle for most of these inquiries. The HSR Form is a universal screening device; it is poorly suited to gathering subject-specific information that is relevant to only a narrow category of transactions or to enforcement responsibilities of agencies other than the Commission and the Antitrust Division.
A. CFIUS and Sovereign Wealth Fund Disclosures (RFI Questions 9–10)
NetChoice respectfully submits that, as a general matter, the HSR Form is the wrong vehicle for most of these inquiries. The HSR Form is a universal screening device; it is poorly suited to gathering subject-specific information that is relevant to only a narrow category of transactions or to enforcement responsibilities of agencies other than the Commission and the Antitrust Division. That is especially true for technology and digital-market transactions, where broad, front-loaded disclosure mandates can operate as a tax on innovation, startup exits and efficient deployment of talent and capital.
CFIUS compliance is the responsibility of the Committee on Foreign Investment in the United States, which already has comprehensive authority under Section 721 of the Defense Production Act to obtain the information it needs from parties to covered transactions. Layering a parallel CFIUS-disclosure requirement onto the HSR Form would (a) duplicate information already collected through the CFIUS process, (b) impose costs on the large majority of HSR filings that have no CFIUS dimension and (c) risk confusion regarding the legal status of mandatory and voluntary CFIUS notifications. To the extent the Agencies wish to coordinate with CFIUS in particular cases, they already have ample authority and well-established interagency mechanisms to do so without modifying the HSR Form.
Sovereign wealth fund disclosure presents a closer question. NetChoice agrees that the relationship between sovereign wealth funds and the sovereigns with which they are affiliated can, in certain narrow circumstances, be relevant to competition analysis—particularly where a sovereign fund’s ownership stake or governance rights could allow it to coordinate the competitive conduct of multiple portfolio companies in the same market. However, the appropriate response is not a universal disclosure requirement on every HSR filing involving any sovereign-affiliated investor, but rather a narrow disclosure triggered only when (a) a sovereign-affiliated entity holds a non-passive position, and (b) there is a horizontal or vertical relationship between the target and another portfolio company in which the same sovereign has a non-passive position. Even then, the disclosure should be limited to the identity of the affiliated sovereign and the nature of the governance rights, not to the underlying operations of the fund.
B. Department of War Contracts (RFI Question 11)
Section 857 of the National Defense Authorization Act for Fiscal Year 2024 (Pub. L. No. 118-31, § 857, 137 Stat. 136, 346 (2023)) already provides a statutory mechanism for the Department of War to receive HSR filings from defense contractors in appropriate cases. Expanding the universal HSR Form to require disclosure of all contracts with, or sales (direct or indirect) to, any department or agency within the Department of War—regardless of competitive overlap—would impose substantial burdens on a wide range of filers, including technology companies whose only relationship to the Department of War is the sale of commercial off-the-shelf cloud, software or hardware products on the same terms available to commercial customers.
Many of NetChoice’s members provide commercial cloud services, productivity software, communications platforms and similar products that are purchased by federal agencies, including DOW components, on standard commercial terms. Requiring extensive disclosure of such routine commercial relationships would (a) impose disproportionate cost on filers with only incidental defense exposure, (b) require the disclosure of competitively sensitive customer relationships and (c) sweep in vast quantities of information that has no bearing on whether any particular transaction would substantially lessen competition in a relevant antitrust market. If additional defense-specific disclosure is warranted, it should be limited to transactions in which (a) a defense contractor identified as such by DOW is a filer, or (b) the transaction involves products or services specifically identified as defense-critical by DOW. Voluntary waivers of the HSR disclosure exemption should remain just that—voluntary.
C. The “Solely for the Purpose of Investment” Exemption (RFI Questions 12–13)
NetChoice appreciates the Agencies’ recognition that recent litigation—including the decision in Texas v. BlackRock Inc. (Texas v. BlackRock Inc., No. 6:24-cv-437, 2025 WL 2201071 (E.D. Tex. Aug. 1, 2025); 15 U.S.C. § 18a(c)(9); 16 C.F.R. § 802.9)—has highlighted the importance of clarity regarding the scope of the investment-only exemption codified at 15 U.S.C. § 18a(c)(9) and 16 C.F.R. § 802.9. The exemption is a critical feature of the HSR Act, reflecting Congress’s recognition that passive financial investment is materially different from acquisitions of operational control and that subjecting routine portfolio investment to mandatory premerger review would impose enormous costs on capital formation without commensurate competition benefit.
Any clarification of the exemption must preserve its core function. NetChoice supports clarifying that the exemption is unavailable where an acquirer in fact uses its voting securities to direct a target’s competitive decision-making—for example, by mandating particular pricing, output or product decisions, or by formally directing the target to coordinate with other portfolio companies in the same market. However, the Agencies must take care to distinguish such active competitive interference from (a) ordinary stewardship engagement on corporate-governance matters, (b) participation in routine shareholder votes on items such as director elections and “say on pay,” (c) public-facing statements by an investor regarding its general investment philosophy or policies and (d) engagement with portfolio companies on operational efficiency, capital allocation or non-competitive matters.
Conflating any of these ordinary investor activities with conduct that defeats the exemption would have severe consequences for U.S. capital markets. Diversified institutional investors—including pension funds, endowments, index funds and other passive vehicles—finance a substantial share of American corporate activity. Subjecting their routine investments to HSR review whenever they hold positions in multiple companies in the same industry would impose enormous costs on capital formation, would not meaningfully advance the Agencies’ enforcement mission and would conflict with longstanding case law and economic literature on the procompetitive effects of diversified investment.
NetChoice accordingly recommends that any clarification (a) preserve the existing safe harbor for acquisitions of 10% or less of voting securities accompanied by a certification of investment intent; (b) define “influence on competitive decision-making” narrowly, focused on direct interference in pricing, output, product or geographic-market decisions; and (c) make clear that ordinary stewardship, voting and corporate-governance engagement do not defeat the exemption.
D. Non-Traditional Transaction Structures, “Acquihires,” and Licensing Agreements (RFI Question 13)
The RFI suggests that the Agencies are concerned about transactions structured as “acquihires,” “reverse acquihires,” non-exclusive intellectual property licenses or convertible-security purchases, on the theory that some such transactions may be structured to evade HSR reportability while having the practical effect of eliminating a market participant. NetChoice urges substantial caution here.
Acquihires and reverse acquihires are a well-established feature of the technology innovation ecosystem. They typically involve a larger company hiring a small team of engineers, designers or researchers from a struggling startup, often together with a license to use intellectual property the team developed. From the perspective of the broader innovation economy, these transactions serve essential functions: they provide an exit pathway for early-stage employees and investors that does not depend on a successful initial public offering; they redeploy human capital from failing ventures to successful ones; and they preserve the value of work that would otherwise be lost when an undercapitalized startup fails. As NetChoice noted in 2023, 58% of U.S. startup founders aim to exit through acquisition, compared with only 17% who aim for an IPO (See NetChoice 2023 Comment, supra (citing data that 58% of U.S. startup founders aim to exit through acquisition compared to 17% targeting an IPO); Engine & Startup Genome, Exits, Investment, and the Startup Experience: The Role of Acquisitions in the Startup Ecosystem (Oct. 2022), https://static1.squarespace.com/static/571681753c44d835a440c8b5/t/6356f5ccf33a6d5962bc7fd8/1666643406527/Exits_Investment_Startup_Experience_role_of_acquisitions_Report_Engine_Startup_Genome.pdf). Acquihires are an important variant of the acquisition exit pathway and should not be treated as inherently suspicious simply because talent and intellectual property move together.
Non-exclusive intellectual property licenses similarly raise no general antitrust concern. Exclusive licenses already may, under existing doctrine, be analyzed as the functional equivalent of acquisitions in appropriate cases; non-exclusive licenses, by their nature, do not eliminate the licensor as a market participant.
Convertible-security transactions are slightly different and may, in narrow circumstances, warrant attention—particularly where the convertible structure is plainly designed to evade the HSR reporting threshold while granting the buyer immediate de facto control of the target. However, the appropriate response is enforcement of existing principles regarding beneficial ownership and de facto control under the current regulations, not a broad expansion of the universe of reportable transactions to include all convertible-security purchases.
If the Agencies nevertheless wish to gather information about non-traditional transaction structures, they should do so through targeted research and policy guidance, not through expansion of the HSR Form. Any rule that would treat ordinary acquihires, non-exclusive licenses or convertible-security investments as presumptively reportable would impose enormous compliance burdens on the technology innovation ecosystem and would directly contradict Congress’s direction that HSR review not “deter or impede” the vast majority of transactions (S. Rep. No. 94-803, pt. 1, at 65-66 (1976)).
E. Single-Family Housing Acquisitions, the Real Estate Exemptions and the REIT Exemption (RFI Questions 16–17)
NetChoice takes no position on the substantive policy debate regarding institutional investment in single-family housing. We do, however, observe that the real estate exemptions codified at 16 C.F.R. §§ 802.2 and 802.5, and the statutory REIT exemption (16 C.F.R. §§ 802.2, 802.5; 15 U.S.C. § 18a(c)(1)), reflect a longstanding congressional and regulatory judgment that ordinary acquisitions of real property—even when aggregated—are unlikely to raise the kind of horizontal competition concerns the HSR Act was designed to identify.
If the Agencies determine that particular categories of housing acquisitions warrant antitrust scrutiny, the appropriate response is a narrow, targeted rule—addressed to those particular transactions and informed by careful economic analysis of the relevant local housing markets—not a wholesale revision of the real estate or REIT exemptions. A categorical removal of either exemption would impose substantial costs on a vast range of commercial and residential real estate transactions that have no plausible connection to the competition concerns identified in Executive Order 14376 (Executive Order 14376, Stopping Wall Street from Competing with Main Street Homebuyers, 91 Fed. Reg. 3023, 3024 (Jan. 20, 2026)).
F. Artificial Intelligence Disclosures (RFI Question 18)
The Agencies should not require filers to disclose their use of artificial intelligence or generative artificial intelligence tools in preparing HSR submissions. Such a requirement would be unprecedented, would single out one category of productivity tool while ignoring others (legal research databases, document review platforms, document management systems, contract analysis software and so on), and would impose substantial compliance burden without any apparent enforcement benefit.
The relevant question for the Agencies is whether the information in an HSR filing is accurate and complete, not what tools were used to prepare it. Filers already certify, under penalty of perjury, that their submissions are accurate; that certification applies regardless of the tools used. Requiring affirmative disclosure of AI usage would (a) impose vague and unworkable line-drawing problems regarding what counts as “use of” such tools (Is searching legal databases that use AI ranking algorithms covered? Is using spell-check?), (b) chill the adoption of efficiency-enhancing tools that, properly used, reduce compliance burden, and (c) create the misleading impression that AI-assisted filings are presumptively suspect.
If the Agencies have specific concerns about particular uses of AI in connection with HSR filings—for example, the use of generative AI to fabricate documents or to obscure responsive material—those concerns should be addressed through enforcement of existing certification and document-production requirements, not through a new disclosure regime.
IV. New or Supplemental HSR Filings for Structural Remedies Would Chill Efficient Settlements (RFI Questions 14–15)
The RFI raises the possibility of requiring new or supplemental HSR filings when merging parties propose structural modifications—such as divestitures, long-term supply agreements or behavioral commitments—during an investigation or enforcement action. NetChoice opposes any such requirement.
First, the proposal misconceives the structure of HSR review. The HSR Act establishes a screening mechanism with a defined statutory waiting period; it is not a comprehensive review-and-approve regime. Once the waiting period expires (or once the Agencies have completed any Second Request and the parties have certified substantial compliance), the parties are entitled to close their transaction subject only to the Agencies’ ordinary post-closing enforcement authority. A rule that would require a new HSR filing—and a new waiting period—whenever the parties propose a structural modification during an investigation would, in effect, give the Agencies an unlimited ability to extend the waiting period unilaterally by triggering successive filings. That outcome cannot be squared with the statutory text or with Congress’s clear direction that HSR review proceed within defined statutory timeframes.
Second, the proposal would chill efficient settlements. The proposal of structural remedies during an investigation is, in many cases, the mechanism by which a transaction that the Agencies view as potentially problematic is restructured into a transaction that the Agencies are content to allow. Subjecting such proposals to a new HSR filing requirement—with the attendant cost, delay and uncertainty—would predictably reduce the frequency with which parties offer remedies, push more transactions into full litigation and increase costs for the parties, the Agencies and the federal courts. The result would not be better antitrust enforcement; it would be more transactions abandoned in the face of agency opposition, regardless of whether that opposition would ultimately have prevailed in court.
Third, the proposal is unnecessary. The Agencies already have ample tools to evaluate proposed remedies. During a Second Request, the Agencies obtain extensive documents and information about the parties’ businesses; that information remains available for analysis of any restructured transaction. The Agencies routinely negotiate consent decrees that include detailed divestiture buyer-vetting and asset-package requirements, and federal courts routinely evaluate divestiture proposals under the Tunney Act (Antitrust Procedures and Penalties Act, 15 U.S.C. § 16 (Tunney Act)) and analogous mechanisms. If the Agencies believe that a particular proposed remedy is inadequately developed, they remain free to litigate the case as originally filed.
Fourth, and most fundamentally, the proposal reflects a category mistake. The HSR Act is a notification statute, not a remedy-evaluation statute. To the extent the Agencies have concerns about “litigate the fix” scenarios in particular cases, those concerns are properly addressed by federal courts in the context of merger litigation, applying ordinary principles of remedies and equity. They are not properly addressed by retrofitting the HSR Form into a vehicle for evaluating settlements.
If the Agencies nevertheless wish to obtain additional information about proposed remedies in particular cases, the existing tools of voluntary access letters, supplemental document requests during ongoing Second Request investigations, and structured timing agreements are amply sufficient. No new filing requirement is needed, and any such requirement should be implemented, if at all, only through a separate notice-and-comment rulemaking with adequate economic and legal analysis.
V. The Foreign Comparators on Which the Updated Form was Modeled have not Produced Better Antitrust Outcomes
In our 2023 comment, NetChoice cautioned that the original 2023 rulemaking would move the U.S. merger review process closer to the European and Chinese models—regimes characterized by lengthy upfront information demands, extensive agency discretion and explicit consideration of factors unrelated to competition. The intervening years have only confirmed the wisdom of avoiding such a move.
Europe’s merger control regime has, in recent years, become an instrument of industrial policy and protectionism, with high-profile interventions in transactions including Illumina/GRAIL (See Illumina, Inc. v. European Commission, Case T-227/21 (Gen. Ct. July 13, 2022)) and a series of conditional clearances that imposed substantial costs without clear consumer benefits. China’s merger control regime has been used, transparently, as a tool of geopolitical leverage. Neither model has produced the kind of dynamic innovation economy that the United States has historically enjoyed, and the European regulatory environment in particular continues to lag the United States substantially in venture capital formation, startup activity and technological innovation. Importantly, the EU itself moved in 2023 to expand its simplified merger procedure, recognizing that universal full-form filing imposes unjustified costs on unproblematic transactions (Commission Notice on a simplified treatment for certain concentrations under Council Regulation (EC) No 139/2004, 2023 O.J. (C 366) 1; see also Alex Bagley, Lawyers welcome “major reform” of EU’s simplified merger regime, Glob. Competition Rev. (Apr. 20, 2023)).
The Agencies should not seek to import the costs of these foreign regimes in pursuit of speculative enforcement benefits. The United States’ historical approach—a streamlined screening notification, a clearly defined statutory waiting period and post-filing investigative tools (Second Requests, voluntary access letters and enforcement litigation) deployed selectively against the small fraction of transactions warranting scrutiny—has produced both vigorous antitrust enforcement (when warranted by the facts) and the most dynamic innovation economy in the world. The recalibration of the HSR Form should preserve, not undermine, that approach.
VI. Specific Procedural and Drafting Recommendations (RFI Questions 6, 22, 23)
Ambiguities Requiring Clarification (RFI Question 6). Beyond the substantive recommendations above, NetChoice notes that the Updated Form’s instructions contained several ambiguities that practitioners flagged during the year the Updated Form was in effect:
- The meaning and scope of “supervisory deal team lead” required new internal compliance processes and remained a source of uncertainty even after FTC Q&A guidance was issued (See Bester & Covaleski, supra & Transaction Advisors, supra.).
- The treatment of draft documents was nominally narrow but, in practice, was substantially broadened by the rule that any document shared with a board member is not a “draft” (See Akin, supra.).
- The instructions for the Overlap Description and Supply Relationships Description did not provide clear guidance on the level of granularity required, the treatment of de minimis overlaps or the treatment of forward-looking or speculative product plans.
- The instructions did not provide clear guidance on the treatment of confidential or competitively sensitive information, particularly information about customer or supplier relationships.
Section Numbering (RFI Question 22). NetChoice agrees that the Form should include section numbers. The absence of clear numbering in the Updated Form impeded the ability of filers, counsel and Agency staff to communicate efficiently about particular requirements.
Disproportionate Burden on Small Businesses (RFI Question 23). As NetChoice emphasized in 2023, and as the FTC’s own burden estimates effectively confirmed (See, Gibson Dunn, supra; Reed Smith, supra; Epstein Becker Green, supra.), the Updated Form imposed disproportionate burden on smaller filers, including (a) startups that found themselves on either side of an HSR-reportable transaction, (b) small private equity sponsors lacking the in-house compliance infrastructure of larger funds and (c) growing companies whose acquisitions of smaller targets were dragged into the HSR threshold for the first time. The most effective way to mitigate these effects is the adoption of the short-form notification track described in Section II above. Additional mitigations include (a) providing clear and easily accessible compliance guidance specifically directed at smaller filers and (b) ensuring that requirements such as document collection from “supervisory deal team leads” do not disproportionately disadvantage filers that lack dedicated M&A functions.
Conclusion
NetChoice appreciates the Agencies’ willingness to take a fresh look at the HSR Form following the district court’s vacatur of the Updated Form in Chamber of Commerce v. FTC. The HSR Act has, for nearly half a century, played a central role in U.S. antitrust enforcement—and, properly administered, has done so without imposing the kind of broad-based compliance burdens that characterize merger control regimes in other major jurisdictions. The Updated Form moved the United States substantially toward those foreign models, and the district court’s opinion concluded that the FTC had not justified those costs against the HSR Act’s “necessary and appropriate” standard (See Chamber of Commerce v. FTC, supra.).
The Agencies’ stocktaking should be guided by the principles Congress laid down in 1976: that HSR review should be a screening mechanism, not a comprehensive approval regime; that it should “neither deter nor impede consummation of the vast majority of mergers and acquisitions” (S. Rep. No. 94-803, pt. 1, at 65-66 (1976)); and that it should focus the Agencies’ limited resources on the small number of transactions that genuinely warrant deeper scrutiny. We urge the Agencies to use this opportunity to restore an HSR notification regime that serves its proper statutory function, supports rather than impedes American innovation and capital formation and treats filers—especially smaller filers and first-time filers—with the procedural fairness and clarity that the rule of law requires.
NetChoice stands ready to work with the Agencies and other stakeholders to develop a streamlined, lawful and effective premerger notification process.
Respectfully submitted,
Patrick Hedger
Director of Policy, NetChoice (The views of NetChoice expressed here do not necessarily represent the views of all NetChoice members.)
NetChoice is a trade association that works to protect free expression and promote free enterprise online.