04-3288. Agency Information Collection Activities; Proposed Collection; Comment Request; Extension

AGENCY:

Federal Trade Commission.

ACTION:

Notice.

SUMMARY:

The information collection requirements described below will be submitted to the Office of Management and Budget (“OMB”) for review, as required by the Paperwork Reduction Act (“PRA”). The Federal Trade Commission (“FTC”) is soliciting public comments on its proposal to extend through May 31, 2007 the current PRA clearance for information collection requirements contained in 16 CFR parts 801-803 (“the HSR rules”). That clearance expires on May 31, 2004.

DATES:

Comments must be filed by April 13, 2004.

ADDRESSES:

Interested parties are invited to submit written comments. Comments should refer to “HSR Rules: Paperwork Comment” to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission/Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580. Comments containing confidential material must be filed in paper form, as explained in the Supplementary Information section. The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. A public comment that does not contain any material for which confidential treatment is requested may instead be filed in electronic form (in ASCII format, WordPerfect, Microsoft Word, or PDF), as part of or as an attachment to an email message sent to the following email box: [e-mail].

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. All timely and responsive public comments, whether filed in paper or electronic form, will be considered by the Commission, and will be available to the public on the FTC Web site, to the extent practicable, at www.ftc.gov. As a matter of discretion, the FTC makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC Web site. More information, including routine uses permitted by the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/​ftc/​privacy.htm.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information should be addressed to B. Michael Verne, 600 Pennsylvania Ave., NW., Room 301, Washington, DC 20580. Telephone: [phone].

SUPPLEMENTARY INFORMATION:

Under the PRA (44 U.S.C. 3501-3520), Federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. “Collection of information” means agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. 44 U.S.C. 3502(3), 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the PRA, the FTC is providing this opportunity for public comment before requesting that OMB extend the existing paperwork clearance for the HSR Rules.

The FTC invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

All persons are hereby given notice of the opportunity to submit written data, views, facts, and arguments addressing the issues raised by this Notice. Written comments must be submitted on or before April 13, 2004. Comments should refer to “HSR Rules: Paperwork Comment” to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission/Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580. If the comment contains any material for which confidential treatment is requested, it must be filed in paper (rather than electronic) form, and the first page of the document must be clearly labeled “Confidential.” ^[1] The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. A public comment that does not contain any material for which confidential treatment is requested may instead be filed in electronic form (in ASCII format, WordPerfect, Microsoft Word, or PDF), as part of or as an attachment to an email message sent to the following email box: [e-mail].

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. All timely and responsive public comments, whether filed in paper or electronic form, will be considered by the Commission, and will be available to the public on the FTC Web site, to the extent practicable, at www.ftc.gov. As a matter of discretion, the FTC makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC Web site. More information, including routine uses permitted by the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/​ftc/​privacy.htm.

Background Information

Section 7A of the Clayton Act (“the Act”), 15 U.S.C. 18a, as added by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. 94-435, 90 Stat. 1390, requires all persons contemplating certain mergers or acquisitions to file notification with the Commission and the Assistant Attorney General and to wait a designated period of time before consummating such transactions. Congress empowered the Commission, with the concurrence of the Assistant Attorney General, to require “that the notification * * * be in such form and contain such documentary material and information * * * as is necessary and appropriate” to enable the agencies “to determine whether such acquisitions may, if consummated, violate the antitrust laws.” 15 U.S.C. 18a(d). Congress similarly granted rulemaking authority to, inter alia, “prescribe such other rules as may be necessary and appropriate to carry out the purposes of this section.” Id.

Pursuant to that section, the Commission, with the concurrence of the Assistant Attorney General, developed the Antitrust Improvements Act Rules (“the HSR rules”) and Notification and Report Form for Certain Mergers and Acquisitions (“the Form”). Changes of a substantive nature have been made in the HSR rules or the Form on a number of occasions.

Burden Statement

Estimated total annual hours burden: 86,828 hours.

In its 2001 PRA submission to OMB regarding the HSR rules, FTC staff estimated that there are 30 “index filings” under Clayton Act Sections 7A(c)(6) and 7A(c)(8) that require 2 hours per filing, and 4,811 non-index filings that require an average of 39 hours per filing.^[2] Staff also estimated that a total of 110 transactions would require an additional 40 hours of burden associated with the more precise determination of transaction value as a result of the introduction of a tiered filing fee system.^[3] Thus, the total estimated hours burden was 192,089 hours [(30 index-filings × 2 hours) + (4,811 non-index filings × 39 hours) + (110 transactions × 40 hours)].

The one amendment to the HSR rules since staff's 2001 PRA submission to OMB did not “affect the information collection requirements of the premerger notification program” and did not require OMB review. See 67 FR 11904, 11906 (Mar. 18, 2002). Thus, the disclosure and notification requirements in the HSR rules remain the same since staff's prior submission to OMB.

Although there has been no change in disclosure and notification requirements, staff estimates that there will be a reduced number of filings in FY 2004 from the number of filings estimated in staff's 2001 PRA submission to OMB.^[4] Using the same percentage as the 2001 submission, staff estimates that 50 of the total non-index transactions will require the additional 40 hours of burden associated with a more precise valuation. Accordingly staff estimates total hours to comply with the HSR rules is 86,828 hours [(21 filings × 2 hours) + (2,174 filings × 39 hours) + (50 transactions × 40 hour)].

This is a conservative estimate. In estimating PRA burden, staff considered “the total time, effort, or financial resources expended by persons to generate, maintain, retain, disclose or provide information to or for a Federal agency.” 5 CFR 1320.3(b)(1). This includes “developing, acquiring, installing, and utilizing technology and systems for the purpose of disclosing and providing information.” 5 CFR 1320.3(b)(1)(iv). Although not expressly stated in the OMB regulation implementing the PRA, the definition of burden arguably includes upgrading and maintaining computer and other systems used to comply with a rule's requirements. Conversely, to the extent that these systems are used in the ordinary course of business independent of the Rule, their associated upkeep would fall outside the realm of PRA “burden.”

Industry has been subject to the basic provisions of the HSR Rules since 1978. Thus, businesses have had several years (and some have had decades) to integrate compliance systems into their business procedures. Accordingly, most companies now maintain records and provide updated order information of the kind required by the HSR Rules in their ordinary course of business. Nevertheless, staff conservatively assumes that the time devoted to compliance with the Rule by existing and new companies remains unchanged from its preceding estimate.

Estimated labor costs: $36,902,000 (rounded to the nearest thousand).

Using the burden hours estimated above, the total labor cost associated with the HSR Rules, based on a conservative estimated average of $425/hour for executives' and attorneys' wages, would be approximately $36.9 million (86,828 hours × $425/hour).

Estimated annual non-labor cost burden: $0 or minimal.

The applicable requirements impose minimal start-up costs, as businesses subject to the HSR Rules generally have or obtain necessary equipment for other business purposes. Staff believes that the above requirements necessitate ongoing, regular training so that covered entities stay current and have a clear understanding of federal mandates, but that this would be a small portion of and subsumed within the ordinary training that employees receive apart from that associated with the information collected under the HSR Rules.

John D. Graubert,

Acting General Counsel.

Footnotes

1.  Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission's General Counsel, consistent with applicable law and the public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).

2.  Clayton Act Sections 7A(c)(6) and (c)(8) exempt from the requirements of the premerger notification program certain transactions that are subject to the approval of other agencies, but only if copies of the information submitted to these other agencies are also submitted to the FTC and the Assistant Attorney General. Thus, parties must submit copies of these filings, which are included in the totals shown, but completing the task requires significantly less time than non-exempt transactions.

3.  This represents approx. 4.6% of the total estimated non-index transactions for 2001. Only the acquiring person is required to determine the value of the transaction.

4.  Filings have dropped significantly in recent years, although staff expects the total number of filings for FY 2004 to increase from the FY 2003 total (1,995) in light of the improving economy and increasing merger activity. Staff expects a 10% increase over the FY 2003 total to 2,195 [1995 filings × (1.00 + .10)]. Staff similarly expects the number of index filings to increase by 10% over the FY 2003 total to 21 [19 index filings × (1.00 + .10)], leaving a total of 2,174 non-index filings. The estimated level of filings for FY 2004 is still lower than the estimated number of filings in staff's 2001 PRA submission to OMB.