Antitrust Alert: HSR and Other FTC Civil Penalties Increase
Adjusted Penalties Effective February 9, 2009
1/15/2009
The Federal Trade Commission (FTC) has authority to impose civil penalties for certain violations of the various statutes it administers. Effective February 9, 2009, those penalties will be increased as follows:
Statute | Violation | Penalty Increase |
|---|---|---|
| HSR Act | Premerger notifi- cation violations | From $11,000 to $16,000 |
| Clayton Act | Cease-and-desist order violations1 | From $6,500 to $7,500 |
| FTC Act | Unfair or deceptive acts or practices2 | From $11,000 to $16,000 |
| Energy Policy and Conservation Act | Recycled oil labeling violations3 | From $6,500 to $7,500 |
| Energy conservation violations4 | From $11,000 to $16,000 | |
| Fair Credit Reporting Act | Violations of the act5 | From $2,500 to $3,500 |
The FTC takes compliance with the various statutes under its jurisdiction seriously and does not hesitate to seek significant civil penalties from violators. It is important to recognize that these penalties are levied on a per violation basis (e.g., per day, per unit, per act, etc.), and thus the total fine can be quite substantial and can reach hundreds of thousands—if not millions—of dollars.
For example, pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act), parties engaged in certain mergers or acquisitions, when specified thresholds are met, are required to file a notification and report form and to observe a statutorily prescribed waiting period prior to closing. Any person who fails to comply with any provision of the HSR Act is liable for a civil penalty for each day during which such person is in violation. The FTC has imposed civil penalties as high as $4 million6 for violations of the HSR Act. (Note that at the time that penalty was issued, the per day penalty amount was still $11,000. Under the increased penalty of $16,000 per day, that penalty could conceivably have been as high as $5.8 million.)
The FTC is required to make these periodic adjustments to the civil penalties pursuant to the Federal Civil Penalties Inflation Act of 1990 based on increases in the Consumer Price Index.
Endnotes
2 Under sections 5(l), 5(m)(1)(A), and 5(m)(1)(B).
6 United States v. The Hearst Trust and The Hearst Corporation (FTC File No. 991 0323).
Feel free to contact one of the attorneys listed below for further information. We would be pleased to assist you with any concerns you may have.
Bruce D. Sokler
(202) 434-7303
BDSokler@mintz.com
Robert G. Kidwell
(202) 661-8752
RGKidwell@mintz.com
Farrah Short
(202) 585-3518
FShort@Mintz.com
