Input Stories

Last week, the business community scored a victory in East Texas.

What’s going on: On Feb. 12, a U.S. District Court in the Lone Star State vacated a punishing 2024 rule by the Federal Trade Commission that had dramatically expanded costly premerger notification requirements. 

• The court ruled that the NAM-opposed 2024 rule—which had changed the premerger notification regulations, form and instructions under the Hart-Scott-Rodino Antitrust Improvements Act—“exceeds 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.”

Mirroring manufacturers: The reasoning mirrors the NAM’s own comments in 2023, when the FTC proposed the changes and the NAM voiced manufacturers’ opposition to them.

• “[T]he proposed amendments to the HSR Rules would stifle job-creating growth in the manufacturing industry without any corresponding benefit to [regulators], merging parties, or the public,” the NAM told the FTC. “The new and unduly burdensome information and processes required by the amendments represent a major overhaul of established, well-understood standards that have been relied upon by businesses and regulators for more than 45 years.”
• The NAM argued that the rule’s costs would outweigh its alleged benefits, “treat[ing] all reportable transactions as deserving of an extensive degree of disclosure and scrutiny far in excess of any actual competitive risks they pose”—reasoning that was directly cited by the court.

Why it’s important: In the one year since the final rule took effect, it had already forced manufacturers to incur additional costs during mergers and acquisitions, as the NAM predicted it would.

• “Manufacturers will experience substantial cost increases as a result [of the final rule], with hundreds of millions of dollars or more being diverted toward lawyers and consultants and away from manufacturing growth,” the NAM argued.

The final word: “M&A transactions in manufacturing set the stage for business efficiencies, enhanced product offerings, reduced costs, and increased capital formation,” said NAM Managing Vice President of Policy Charles Crain. “Manufacturers are encouraged by the district court’s decision striking down this overreaching and costly rule, and we encourage policymakers to protect businesses’ ability to grow and drive economic expansion in the United States.”