US court blocks expanded merger disclosure rule
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A view of signage at the Federal Trade Commission (FTC) headquarters in Washington, D.C., U.S., November 24, 2024. REUTERS/Benoit Tessier
By Jody Godoy
Feb 12 (Reuters) - A U.S. federal judge in Texas on Thursday blocked a rule that expanded the amount of information companies have to turn over when seeking a merger review, saying it exceeded the Federal Trade Commission's authority.
The rule, finalized in 2024, provided antitrust enforcers at the FTC and the U.S. Department of Justice with more information about mergers and acquisitions.
Some dealmakers had scrambled to file for approval before the rule came into effect last February, in order to avoid its requirements. The U.S. Chamber of Commerce sued to block the rule last year.
U.S. District Judge Jeremy Kernodle in Tyler, Texas, an appointee of President Donald Trump, said the FTC had not shown the rule's benefits would outweigh its costs.
"Though the FTC asserts that the rule will detect illegal mergers and save agency resources, the FTC fails to substantiate these assertions," he wrote.
While the rule was finalized in the waning days of the Biden administration, current FTC Chairman Andrew Ferguson, who was then a commissioner, voted in its favor, calling it "a lawful improvement over the status quo" at the time.
"We are reviewing the ruling and weighing our options," a spokesperson for the FTC said. "The Chamber of Commerce is a left-wing, open borders supporting activist group.”
The Chamber is the largest business lobby group in the U.S., whose board includes executives from FedEx, Sempra, Abbott Laboratories, Fidelity Investments, Meta Platforms, Microsoft and Nasdaq.
Daryl Joseffer, executive vice president of the Chamber's litigation center, said in response to the ruling: "We are pleased with the court’s decision today rejecting the Biden Administration’s onerous merger tax.”
A Chamber spokesperson did not comment on the FTC spokesperson's description of the organization.
(Reporting by Jody Godoy in Los Angeles; Editing by Christopher Cushing and Jamie Freed)
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