Premerger Notification; Reporting and Waiting Period Requirements
The Federal Trade Commission ("FTC" or "Commission") is issuing this advance notice of proposed rulemaking ("ANPRM") to gather information, related to seven topics, that will help to determine the path for future amendments to the premerger notification rules ("the Rules") under the Hart-Scott-Rodino Antitrust Improvements Act ("the Act" or "HSR").
What this rule actually says
The FTC is exploring whether to update rules that require large companies to notify the government before merging with or acquiring other companies. The Hart-Scott-Rodino Act (HSR) aims to catch anti-competitive deals early. This particular rule is still in "proposed" stage—the FTC is gathering feedback on what changes might be needed, not yet enforcing new requirements.
Who it applies to
- If you're a solo founder or small team with under $100M in revenue: This almost certainly doesn't apply to you right now. HSR thresholds are very high.
- If you're raising a Series B+ and considering acquisition: This *might* apply, but only if the acquirer is large enough (roughly $100M+ in assets). Check with an M&A lawyer.
- If you process health data (medical scribes, patient records): HSR doesn't care about data type—it only cares about deal size. You're not subject to this rule based on your AI use case.
- If you're outside the US: This only applies to deals involving US companies meeting the threshold. International deals may have different rules.
- If you're planning to stay independent: This regulation has zero impact on your day-to-day operations.
What founders need to do
- Do nothing right now (~0 hours). This is proposed, not final. The FTC is still collecting comments through 2021. Monitor the status if you think you might raise $500M+ Series funding.
- If you're acquired or acquiring another company in the next 2 years, consult an M&A lawyer (~1-2 hours). They'll determine if HSR filing is required based on the deal size. If required, the filing takes 1-2 weeks and costs $3,000–$5,000+.
- Bookmark the FTC HSR page (~10 minutes). Check it annually if you're fundraising. The rules may change, but they won't affect typical indie startups.
- Don't overthink data privacy here. HSR is about competition law, not data handling. If you're worried about processing user data legally, focus on HIPAA (medical), GDPR (EU users), or CCPA (California) instead.
Bottom line
Monitor only if you're raising a Series B and planning to be acquired within 2 years; otherwise, ignore.