This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0705a.RRS
DATE: 1/27/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 705 Mergers and Acquisitions Reporting
SPONSOR(S): Grall
TIED BILLS: IDEN./SIM. BILLS: SB 1112
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 15 Y, 0 N Wright Anstead
2) Appropriations Committee
3) Commerce Committee
SUMMARY ANALYSIS
Healthy competition in economic markets keeps prices low and quality high for consumers. When one entity
becomes too strong, it can stifle competition, leading to higher prices and harm to consumers. Antitrust law
exists to protect consumers by promoting competition in the marketplace.
The U.S. Congress, and many states, has passed several laws to help promote competition by outlawing unfair
methods of competition. One such law is the Hart-Scott-Rodino Act (HSRA), which requires entities to provide
certain federal government agencies with information about large mergers and acquisitions before they occur,
in a notification form called the “Notification and Report Form for Certain Mergers and Acquisitions” (HSRA
filing).
Currently, the Florida Office of the Attorney General (OAG) does not receive notice of HSRA filings unless they
are voluntarily provided by the combining entities or discovered through public sources. In addition, such
sources are not generally made publicly available by the federal government.
The bill requires any entity conducting business in the state to provide notice to the OAG that it has submitted
an HSRA filing at the same time the HSRA filing is filed with the federal government.
The bill provides an effective date of July 1, 2022.
The bill will not have a fiscal impact on local governments, and may have a minimal, indeterminate fiscal
impact on state government. STORAGE NAME: h0705a.RRS PAGE: 2
DATE: 1/27/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Antitrust Law
Healthy competition in economic markets keeps prices low and quality high for consumers. When one
entity becomes too strong or entertains unfair methods of competition, it can stifle competition, leading
to higher prices and harm to consumers. Antitrust law exists to protect competition, but not necessarily
individual competitors, in economic markets, based on the idea that an unregulated market will lead to
the creation of coercive monopolies.
1
Federal antitrust law includes the Sherman Antitrust Act, the Clayton Act, and the Federal Trade
Commission Act. These laws are enforced in federal district court
2
by the U.S. Department of Justice
(DOJ), the Federal Trade Commission (FTC), state Attorneys General, and private plaintiffs. Antitrust
case law is well-developed, and it is often difficult to distinguish aggressive, pro-competitive conduct—
which is legal—from predatory, anti-competitive conduct.
3
The Clayton Act
4
prohibits specific business actions, including mergers and acquisitions, which may
substantially lessen competition. To determine whether a merger violates the Clayton Act, a court must
decide whether the merger is likely to create an appreciable danger of anticompetitive effects.
5
The Sherman Antitrust Act
6
prohibits any attempt to restrain trade or form a monopoly in a predatory
manner. A monopoly has two elements: (1) monopoly power and (2) willful acquisition or maintenance
of that power, as opposed to power naturally resulting from a superior product, acumen, or historic
accident. Penalties for violating the Sherman Act include up to ten years’ imprisonment and a fine up to
$100 million for a corporation or $1 million for any other person.
7
The Florida Antitrust Act of 1980
8
is intended to complement federal antitrust law in order to foster
effective competition. Implemented by the Office of the Attorney General (OAG), it essentially mirrors the
federal Sherman Act, and prohibits:
9
Every contract, combination, or conspiracy in restraint of trade or commerce;
10
and
Monopolization or attempted monopolization of any part of trade or commerce.
11
A Florida antitrust law violation is punishable by up to three years' imprisonment and fines up to $1
million for a corporation and $100,000 for any other person.
12
There is also a private right of action for
any person injured by certain antitrust violations.
13
Florida law does not provide a corollary to the federal Clayton Act, which specifically targets mergers
and acquisitions that may lessen competition. However, the Attorney General considers the Florida
1
John J. Miles, Antitrust Primer, 20140513 AHLA Seminar Papers 1 (2014) (The purpose of antitrust law is to "protect and promote
competition as the primary method by which this country allocates scarce resources to maximize the welfare of consumers.").
2
Steven Fox, Litigation Under Florida's Deceptive and Unfair Trade Practices Act, the Florida Antitrust Act, or Federal Antitrust
Statutes, The Florida Bar, Business Litigation in Florida (2017) (Federal district courts have exclusive jurisdiction over federal antitrust
actions).
3
Animesh Ballabh, Antitrust Law: An Overview, 88 J. Pat. & Trademark Off. Soc'y 877 (2006); John J. Miles, Antitrust Primer, 20140513
AHLA Seminar Papers 1 (2014).
4
15 U.S.C. § 18;
5
See also Olin Corp. v. FTC, 986 F.2d 1295, 1305 (9th Cir. 1993) (discussing how plaintiff’s establishment of a prima facie case on
statistical evidence is first step in a court’s analysis); Chicago Bridge & Iron Co. v. FTC, 534 F.3d 410, 423 (5th Cir. 2008).
6
15 U.S.C. §§ 1 et seq.
7
15 U.S.C. § 1.
8
Ss. 542.15 – 542.36, F.S.
9
S. 542.16, F.S.
10
S. 542.18, F.S.
11
S. 542.19, F.S.
12
S. 542.21, F.S.
13
Ss. 542.21 and 542.22, F.S. STORAGE NAME: h0705a.RRS PAGE: 3
DATE: 1/27/2022
Antitrust Act of 1980 and the Florida Deceptive and Unfair Trade Practices Act broad enough to
encompass those types of violations.
14
Premerger Notification Program
The Hart-Scott-Rodino Act
15
(HSRA), an amendment to the Clayton Act, established the federal
Premerger Notification Program (PNP), which provides the FTC and the DOJ with information about
large mergers and acquisitions before they occur.
16
The PNP was established to avoid some of the
difficulties and expense that the enforcement agencies encounter when they challenge anticompetitive
acquisitions after they have occurred. Prior review under the PNP enables the FTC and the DOJ to
determine which acquisitions are likely to be anticompetitive and to challenge them at a time when
remedial action is most effective.
17
The parties to certain proposed transactions must submit premerger notification to the FTC and DOJ.
Premerger notification involves completing the “Notification and Report Form for Certain Mergers and
Acquisitions” (HSRA filing) with information about each company’s business.
18
HSRA requires persons contemplating proposed business transactions that satisfy certain size
criteria to report their intentions to the enforcement agencies before consummating the
transaction. If the proposed transaction is reportable, then both the acquiring person and the
person whose business is being acquired must submit information about their respective business
operations to the enforcement agencies and wait a specific period of time before consummating
the proposed transaction. During that waiting period, the enforcement agencies review the
antitrust implications of the proposed transaction. Whether a particular transaction is reportable
is determined by application of HSRA, the related rules, and formal and informal staff interpretations.
As a general matter, HSRA and the related rules require both acquiring and acquired persons to file
notifications under the PNP if all of the following conditions are met:
19
As a result of the transaction, the acquiring person will hold an aggregate amount of voting
securities, non-corporate interests (NCI) and/or assets of the acquired person valued in excess
of $200 million (as adjusted), regardless of the sales or assets of the acquiring and acquired
persons ; or
As a result of the transaction, the acquiring person will hold an aggregate amount of voting
securities, NCI and/or assets of the acquired person valued in excess of $50 million (as
adjusted) but at $200 million (as adjusted) or less; and
One person has sales or assets of at least $100 million (as adjusted); and
The other person has sales or assets of at least $10 million (as adjusted).
Florida’s Role in Premerger Actions
State Attorneys General, including Florida’s, have power under the Clayton Act to independently sue to
enjoin a merger or acquisition. But, according to industry experts, State Attorneys General (State AGs)
do not have access to the same investigative tools as federal enforcers, such as automatically
receiving HSRA filings. For this reason, State AGs more typically allow the federal agencies to take the
lead in merger investigations and enforcement actions.
20
14
Florida Attorney General, Antitrust, http://myfloridalegal.com/antitrust (last visited Jan. 25, 2022).
15
15 U.S.C. § 18a.
16
Federal Trade Commission, Premerger Notification Program, Premerger Notification Program | Federal Trade Commission (ftc.gov)
(last visited Jan. 25, 2022).
17
FTC Premerger Notification Office, Introductory Guide I, p. 1 (Mar. 2009), Introductory Guide 1- What is the Premerger Notification
Program? An Overview (ftc.gov) (last visited Jan. 25, 2022).
18
FTC, supra note 16.
19
FTC PNO, supra note 17 at 2-3.
20
Bruning Law Group, State Attorneys General and Their Influence on Merger Enforcement, State Attorneys General and Their
Influence on Merger Enforcement - Bruning Law Group (last visited Jan. 25, 2022). STORAGE NAME: h0705a.RRS PAGE: 4
DATE: 1/27/2022
The HSRA contains confidentiality provisions
21
that prohibit the federal agencies from sharing
information gathered pursuant to the HSR Act with State AGs absent the consent of the merging
parties. According to industry practitioners, in order to avoid the burden of having to comply with
multiple demands for information, the parties generally provide such consent. Upon receiving consent
from the merging parties, the federal agencies are permitted to provide State AGs with copies of any
issued civil investigative demands or second requests.
22
The OAG has expressed that receiving notices of these transactions prior to their consummation will
enable the OAG to stop anticompetitive transactions and preserve competition.
23
Effect of the Bill
The bill requires any entity conducting business in the state to provide notice to the OAG that it has
submitted an HSRA filing at the same time the HSRA filing is filed with the federal government.
B. SECTION DIRECTORY:
Section 1: Provides filing requirements for certain large entities participating in a merger or
acquisition.
Section 2: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
Receiving HSRA filings may cause an increased workload. There is likely a minimal, though
indeterminate, fiscal impact.
24
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Unknown.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
21
15 U.S.C. § 18A(h).
22
Bruning Law Group, supra note 20.
23
Office of the Attorney General, Agency Analysis of 2022 House Bill 705, Jan. 25, 2022.
24
Id. STORAGE NAME: h0705a.RRS PAGE: 5
DATE: 1/27/2022
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES