A recent Federal Trade Commission (FTC) blog post highlights the importance of implementing HSR compliance systems that monitor all reportable acquisitions, not only those that involve monetary payment. The HSR Antitrust Improvements Act of 1976, as amended (15 U.S.C. § 18a) (the HSR Act) requires companies to file notification with the FTC prior to effectuating certain acquisitions or mergers. Many companies use HSR compliance systems to ensure that the FTC is properly notified of reportable transactions. According to the FTC, however, many of these compliance systems fail to identify certain common acquisition, reorganization and consolidation transactions, which nonetheless require reporting. This may lead to civil liability and financial penalties at a current rate of up to $41,484 per day for each day of noncompliance.
The FTC cautions against HSR compliance systems that track only transactions involving a payment by check, as various common transactions require reporting under the HSR Act despite their lack of monetary payment. Some examples of such transactions include: