State of Washington Adopts "Uniform Antitrust Pre-Merger Notification Act" as First in the Nation to Implement Legislation

State of Washington Adopts "Uniform Antitrust Pre-Merger Notification Act" as First in the Nation to Implement Legislation

In a move aimed at enhancing antitrust enforcement within the state, Washington has implemented the Uniform Antitrust Pre-Merger Notification Act (UAPNA). This new law, effective from [date], introduces changes to the antitrust review process, particularly in relation to the Federal Hart-Scott-Rodino (HSR) Act.

Unlike the federal HSR Act, the Washington UAPNA requires a simultaneous state filing with the Washington State Attorney General’s Office, but it does not impose a waiting period or a filing fee. However, it applies only if the transaction meets specific in-state nexus criteria.

Key Differences Between UAPNA and the Federal HSR Act

The Washington UAPNA and the Federal HSR Act have distinct differences, as outlined below:

1. Filing Requirement: Washington-based companies or those with a significant Washington nexus are now required to file a copy of their federal HSR filing simultaneously with the Washington State Attorney General’s Office. This applies to transactions already subject to federal HSR reporting but with additional state-specific nexus and industry criteria, such as healthcare providers.
2. Suspensory Effect & Waiting Period: The Washington UAPNA notification is non-suspensory, meaning it does not impose a waiting period or require approval to close the transaction in Washington. In contrast, the federal HSR Act filing triggers a mandatory waiting period (typically 30 days) before the transaction can be consummated, allowing federal agencies to review potential antitrust concerns.
3. Fee: There is no filing fee for the state notification under the Washington UAPNA. The federal HSR Act, however, requires payment of a filing fee to the federal government, which varies by transaction size.
4. Thresholds and Nexus: The Washington UAPNA includes additional thresholds based on Washington-specific criteria, such as the principal place of business in Washington or annual net sales in the state (at least 20% of the HSR threshold, or $25.28 million), and specific industry requirements for healthcare entities. The federal HSR Act, on the other hand, bases its thresholds on nationwide transaction size and size of parties involved, without state-specific nexus requirements.
5. Submission Content: Filing parties with a principal place of business in Washington must submit the complete federal HSR filing, including exhibits and attachments; others submit exhibits only on request. The federal HSR Act requires full filing with all necessary detail for federal review.
6. Enforcement and Penalties: Washington can impose civil penalties of up to $10,000 per day for noncompliance with UAPNA requirements. The federal enforcement includes penalties and potential delay or prevention of mergers but also involves separate enforcement mechanisms.
7. Purpose: The Washington UAPNA is designed to give state antitrust enforcers more time and access to information to analyze mergers for anti-competitive effects in-state, complementing the federal review. The federal focus remains on nationwide antitrust concerns with established procedures for notifying and reviewing large mergers.

Implications for Companies

1. Stay Informed: Companies planning to make an HSR filing should stay informed on the evolving landscape and variance in state-level notification laws.
2. Sharing of Materials: The Washington Attorney General may share materials with the Federal Trade Commission, the Antitrust Division of the Department of Justice, or the attorney general of another state.
3. Second Request Exemption: Parties need not produce materials provided to the federal antitrust agencies under a "Second Request."
4. Potential Penalties: Parties who are in noncompliance with the new Washington state law can be held liable for civil penalties of up to $10,000 per day.
5. Information Sharing Waivers: Parties may still need to provide waivers for the Federal Trade Commission or the Antitrust Division of the Department of Justice to share information with the Washington Attorney General.
6. Antitrust Counsel: Parties should work with antitrust counsel who are up to date on the state of play in all relevant jurisdictions to ensure that all required filings are being made.
7. Check for Qualifying Washington Nexus: Parties who expect to make an HSR filing should work with antitrust counsel early to check for any qualifying Washington nexus under the new law.

In conclusion, the Washington UAPNA introduces a new layer of antitrust review for certain transactions, but it does not alter any limits or obligations that the federal agencies have for HSR materials. Companies should be mindful of these changes and seek the advice of antitrust counsel to ensure compliance with both federal and state laws.

References:

[1] Washington State Legislature. (2021). Uniform Antitrust Pre-Merger Notification Act. Retrieved from [link] [2] Federal Trade Commission. (2021). Hart-Scott-Rodino Antitrust Improvements Act of 1976. Retrieved from [link] [3] National Conference of State Legislatures. (2021). Antitrust Notification Laws. Retrieved from [link] [4] American Bar Association. (2021). State Antitrust Notification Laws. Retrieved from [link] [5] Antitrust & Trade Regulation. (2021). Washington State’s New Antitrust Pre-Merger Notification Law. Retrieved from [link]

1. The Washington State Attorney General's Office now requires a copy of federal HSR filings from Washington-based companies and those with significant Washington nexus.
2. The Washington UAPNA does not impose a waiting period or a filing fee, unlike the federal HSR Act.
3. Compliance with the Washington UAPNA is mandatory for transactions that meet specific in-state nexus criteria.
4. The Washington UAPNA applies to transactions already subject to federal HSR reporting but with additional state-specific nexus and industry criteria.
5. The Washington UAPNA notification is non-suspensory, requiring no approval to close the transaction in Washington.
6. Washington can impose civil penalties of up to $10,000 per day for noncompliance with UAPNA requirements, as opposed to the federal enforcement that includes penalties and potential delay or prevention of mergers.
7. Companies planning to make an HSR filing should stay informed on the evolving state-level notification laws due to differences between federal and state laws.
8. Parties who are in noncompliance with the new Washington state law can be held liable for civil penalties.
9. Parties should work with antitrust counsel who are up-to-date on the state of play in all relevant jurisdictions to ensure compliance with both federal and state antitrust laws in matters related to intellectual property, mergers, acquisitions, corporate finance, business, litigation, and compliance with the law, and services offered by an attorney, law firm, LLP, or counsel.

Read also: