FTC Increases Civil Penalty Maximum for HSR and FTC Order Violations | Practical Law

FTC Increases Civil Penalty Maximum for HSR and FTC Order Violations | Practical Law

The Federal Trade Commission (FTC) increased the maximum civil penalty for Hart-Scott-Rodino (HSR) violations and FTC order violations from $40,000 per day to $40,654 per day. The penalty for other violations within the FTC's jurisdiction were also adjusted. The increases will go into effect on January 24, 2017.

FTC Increases Civil Penalty Maximum for HSR and FTC Order Violations

Practical Law Legal Update w-005-5455 (Approx. 3 pages)

FTC Increases Civil Penalty Maximum for HSR and FTC Order Violations

by Practical Law Antitrust
Published on 24 Jan 2017 • USA (National/Federal)
The Federal Trade Commission (FTC) increased the maximum civil penalty for Hart-Scott-Rodino (HSR) violations and FTC order violations from $40,000 per day to $40,654 per day. The penalty for other violations within the FTC's jurisdiction were also adjusted. The increases will go into effect on January 24, 2017.
On January 13, 2017, the FTC announced that effective January 24, 2017, the maximum civil penalty for HSR violations and violations of FTC orders relating to unfair or deceptive acts or practices will increase from $40,000 per day to $40,654 per day. The FTC stated that the increase is statutorily mandated to adjust for inflation.
The increased maximum will apply to violations that predate the effective date, but does not change penalties already assessed or those being actively collected.
The antitrust agencies have assessed civil penalties against transacting parties for HSR Act violations including:
  • Failure to file an HSR form based on improper use of an exemption, such as the investment-only exemption.
  • Structuring a transaction solely to avoid the HSR Act, known as a Rule 801.90 violation.
  • Gun-jumping violations.
  • Failure to file an HSR form because of an inadvertent or willful violation.
  • Failure to file Item 4(c) documents in an HSR form.
The adjusted maximum civil penalty amount of $40,654 applies to violations of orders issued under the FTC Act, including:
  • Orders issued for unfair or deceptive acts or practices under Section 5(l) of the FTC Act (15 U.S.C. § 45(l)).
  • Initial or final cease and desist orders for unfair or deceptive acts or practices under Section 5(m)(1)(A) and (B) of the FTC Act (15 U.S.C. §§ 45(m)(1)(A) and (m)(1)(B)).
For more information on civil penalties assessed for HSR violations, see HSR Act Enforcement Actions: Comprehensive Civil Penalties Chart.
The penalties for other violations within the FTC's jurisdiction are also being adjusted, including:
  • For refusal to file required reports within the time period set by the FTC, which has increased from $525 to $534 per day (15 U.S.C. § 50).
  • For violations of cease and desist orders issued under Section 11 of the Clayton Act, which has increased from $21,250 to $21,598 (15 U.S.C. § 21(l)).