DealLawyers.com Blog

Last Thursday, in US Chamber of Commerce v. FTC, (E.D. Tex.; 2/26), the US District Court for the Eastern District of Texas vacated the final rules implementing the FTC & DOJ’s overhaul of the HSR reporting regime which went into effect last year. Here’s an excerpt from Gibson Dunn’s memo summarizing the Court’s decision:

In Chamber of Commerce v. FTC, a coalition of business groups led by the U.S. Chamber of Commerce challenged the FTC’s 2024 Rule. On February 12, 2026, Judge Jeremy D. Kernodle on the U.S. District Court for the Eastern District of Texas granted summary judgment to the plaintiffs, holding that the 2024 Rule exceeded the FTC’s statutory authority because “the agency has not shown that the Rule’s claimed benefits will ‘reasonably outweigh’ its significant and widespread costs.”

Under the HSR Act, the FTC may request only pre‑merger information “necessary and appropriate” to assess whether a transaction may violate the antitrust laws—a standard the Court interpreted as requiring a reasonable cost‑benefit analysis. The FTC failed to meet that requirement. Although the FTC acknowledged that the 2024 Rule would nearly triple filing time—from 37 to 105 hours—the Court found the FTC could not substantiate the benefits it claimed the changes would produce. For example, the FTC was unable to identify a single illegal merger in the 46‑year history of the prior form that the new form would have prevented. The Court rejected the FTC’s argument that the 2024 Rule would conserve agency resources, noting that any efficiency gains would accrue only in the roughly 8% of transactions the FTC investigates, while all filers would bear the increased compliance burden.

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.

The Court vacated and set aside the 2024 Rule but stayed its decision through February 19, 2026. During this period, the FTC may choose to appeal or allow the prior HSR reporting rule to take effect.

The memo says that the rule will likely remain in effect during the appeal process, but if the FTC doesn’t appeal by February 20th, the premerger notification requirements will revert to the prior HSR reporting rule on that date. We’re posting memos in our “Antitrust” Practice Area.

– John Jenkins