2010-3957. Agency Information Collection Activities; Proposed Collection; Comment Request; Extension

AGENCY:

Federal Trade Commission (“FTC” or “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 FTC is seeking public comments on its proposal to extend through May 31, 2013, the current PRA clearance for information collection requirements contained its Antitrust Improvements Act Rules (“HSR Rules”) and corresponding Notification and Report Form for Certain Mergers and Acquisitions (“Notification and Report Form”). That clearance expires on May 31, 2010.

DATES:

Comments must be filed by April 27, 2010.

ADDRESSES:

Interested parties are invited to submit written comments electronically or in paper form by following the instructions in the Request for Comments part of the SUPPLEMENTARY INFORMATION section below. Comments in electronic form should be submitted by using the following weblink: (https://public.commentworks.com/​ftc/​hsrpra) (and following the instructions on the web-based form). Comments filed in paper form should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, N.W., Washington, DC 20580, in the manner detailed in the SUPPLEMENTARY INFORMATION section below.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information or copies of the proposed information requirements should be addressed to Sheila Clark-Coleman, Compliance Specialist, 600 Pennsylvania Ave., N.W., Room 301, Washington, D.C. 20580. Telephone: [phone].

SUPPLEMENTARY INFORMATION:

Request for Comments:

Interested parties are invited to submit written comments. Comments should refer to “HSR Rules: FTC File No. P989316” to facilitate the organization of comments. Please note that your comment - including your name and your state - will be placed on the public record of this proceeding, including on the publicly accessible FTC website, at (http://www.ftc.gov/​os/​publiccomments.shtm).

Because comments will be made public, they should not include any sensitive personal information, such as any individual’s Social Security Number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. Comments also should not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, comments should not include “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential” as provided in Section 6(f) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing matter for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c).¹

Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted using the following weblink (https://public.commentworks.com/​ftc/​hsrpra) (and following the instructions on the web-based form). To ensure that the Commission considers an electronic comment, you must file it on the web-based form at the weblink (https://public.commentworks.com/​ftc/​hsrpra). If this Notice appears at (www.regulations.gov/​search/​index.jsp), you may also file an electronic comment through that website. The Commission will consider all comments that regulations.gov forwards to it.

The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives, whether filed in paper or electronic form. Comments received will be available to the public on the FTC website, to the extent practicable, at (http://www.ftc.gov/​os/​publiccomments.shtm). 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 website. 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.shtm).

Under the PRA, 44 U.S.C. 3501-3521, 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 and the corresponding Notification and Report Form, 16 CFR. Parts 801-803.

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 comments should be filed as prescribed in the ADDRESSES section above, and must be received on or before April 27, 2010.

Background Information:

Section 7A of the Clayton Act (“Act”), 15 U.S.C. 18a, as amended 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 HSR Rules and the corresponding Notification and Report Form. The following discussion presents the FTC’s PRA burden analysis regarding completion of the Notification and Report Form.

Burden statement:

Estimated total annual hours burden: 33,298 hours

The following burden estimates are primarily based on FTC data concerning the number of HSR filings and staff’s informal consultations with leading HSR counsel.

In the FTC’s 2007 PRA submission to OMB regarding the HSR Rules and the Notification and Report Form, FTC staff estimated that there were 32 “index filings” under Clayton Act Sections 7A(c)(6) and 7A(c)(8)² that required 2 hours per filing, and 3,966 non-index filings that required, on average, approximately 39 hours per filing.³ Moreover, staff estimated that approximately 91 non-index transactions would require an additional 40 hours of burden due to the need for a more precise valuation of transactions that are near a filing fee threshold.⁴

In fiscal year 2009 there were 1,411 non-index filings and 24 index filings. Based on an average decrease of 40.4% in fiscal year 2007 - fiscal year 2009 in the number of non-index filings, staff projects a total of 841 non-index filings for fiscal year 2010. Likewise, based on an average decrease of 18.4% in index filings over the same time period, staff projects a total of 20 index filings for fiscal year 2010. Retaining the FTC’s prior assumptions, staff estimates that non-index filings require approximately 39 burden hours per filing and index filings require an average of 2 hours per filing. Moreover, staff estimates that for fiscal year 2010 approximately 22 non-index transactions will require an additional 40 hours of burden due to the need for more precise valuation of transactions that are near a filing fee threshold.⁵ Thus, the total estimated hours burden before adjustments is 33,719 hours [(841 non-index filings x 39 hours) + (20 index filings x 2 hours) + (22 acquiring person non-index filings requiring more precise valuation⁶ x 40 hours)].

As in the past, however, staff further estimates that half of those submitting non-index filings will incorporate Item 4(a) and Item 4(b) documents by reference to an Internet link, and that doing so will reduce individual burden by one hour. Accordingly, the cumulative reduction to the above total would be 421 hours (841 non-index filings x 1/2 =421, multiplied by 1 hour), resulting in net estimated burden for fiscal year 2010 of 33,298 hours.

This estimate is conservative. 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 definitions 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 customarily used in the ordinary course of business independent of the Rule, their associated upkeep would fall outside the realm of PRA “burden.” See 5 CFR 1320.3(b)(2).

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: $15,317,080

Using the burden hours estimated above and applying an estimated average of $460/hour for executive and attorney wages,⁷ staff estimates that the total labor cost associated with the HSR Rules and the Notification and Report Form is approximately $15,317,080 (33,298 hours x $460/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 and the corresponding Notification and Report Form.

David C. Shonka

Principal Deputy General Counsel

Footnotes

1.  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 FTC 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 (the so-called “index filings”), 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.  These are long-standing estimates that have been repeatedly vetted through the PRA comment process. See, e.g., 59 FR 30588 (June 14, 1994); 69 FR 7225, 7226 (Feb. 13, 2004); 72 FR 18251, 18252 (Apr. 11, 2007).

4.  See 72 FR 18252.

5.  This number is based on the volume of fiscal year 2009 non-index transactions, 716, reduced by transactions involving an acquisition of 50% or more of an entity’s assets or voting securities. The rationale for this exclusion is that the remainder, 38 transactions, reflects incremental acquisitions that fell between notification and filing fee thresholds and thus would likely need more precise valuation to determine which side of a threshold the transaction falls upon. The resulting fiscal year 2009 total, 38, is then used to project the fiscal year 2010 volume of such transactions. To do this, we first calculated the proportion this net figure represents in relation to the total fiscal year 2009 non-index transactions: 38 ÷ 716 = 5.3%.

This percentage is then applied to the projected number of fiscal year 2010 non-index transactions in order to estimate the proportion of them that will require more precise valuation. Assuming that half the projected number of fiscal year 2010 non-index filings will constitute the number of associated transactions, that would result in approximately 421 non-index transactions (841 ÷ 2). To this we then carry over and apply the above 5.3% apportionment to arrive at an estimate of 22 non-index transactions in fiscal year 2010 that will require more precise measurement.

6.  Only the acquiring person is subject to a filing fee; thus, this specific focus.

7.  The FTC’s previous estimate of $425 per hour has been increased by the Social Security COLA percentage for fiscal years 2007 - fiscal year 2009 (fiscal year 2007(2.3%), fiscal year 2008 (5.8%)), fiscal year 2009 (0%)).