Comments to FTC-DOJ: HSR Premerger Notification and Report Form

By SBE Council at 26 May, 2026, 6:22 pm

Federal Trade Commission
Office of the Secretary
600 Pennsylvania Avenue, NW
Washington, DC 20580

U.S. Department of Justice
Antitrust Division
950 Pennsylvania Avenue, NW
Washington, DC 20530

Submitted via www.regulations.gov

Re: Request for Public Comment Regarding Making Improvements to the Premerger Notification and Report Form

To Whom It May Concern:

The Small Business & Entrepreneurship Council ("SBE Council") submits these comments in response to the Federal Trade Commission ("FTC") and Department of Justice ("DOJ") request for public comment regarding potential revisions to the Hart-Scott-Rodino ("HSR") Premerger Notification and Report Form.

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For more than 30 years, SBE Council has worked to advance policies and private-sector initiatives that strengthen America's startup ecosystem, improve the competitiveness and growth of small businesses, and foster innovation, investment, and economic growth.

SBE Council supports fair antitrust enforcement and recognizes the principal role that the HSR process plays in providing federal antitrust agencies with advance notice of transactions that may warrant closer review. However, we are deeply concerned that the broad expansion of reporting requirements contemplated by the Agencies risks transforming the HSR process from a targeted notification system into an expansive investigatory regime that would impose substantial costs and burdens on businesses without clear evidence of corresponding benefits.

The Agencies should proceed cautiously and avoid reviving or expanding policies that were appropriately challenged in federal court due to concerns involving administrative overreach, procedural deficiencies, and the significant burdens imposed on small businesses. The prior overhaul of the HSR form represented the most sweeping expansion of premerger filing obligations in the history of the program. Many stakeholders, including SBE Council, raised serious concerns that the changes failed to properly account for the disproportionate impact on startups, emerging growth firms, and most of the businesses participating in transactions that pose no competitive concerns.

Regulatory Changes in Search of a Non-Existent Problem?

The current HSR framework already provides the Agencies with authority to identify and investigate transactions that raise legitimate competitive concerns. Expanding filing obligations across virtually all transactions would impose sweeping new costs, delays, and uncertainty on startups and small businesses without clear evidence that the existing system is failing.

The HSR system has functioned effectively for decades as a practical and efficient screening mechanism. The overwhelming majority of transactions reviewed under the HSR process do not raise antitrust concerns or result in a second request investigation. That fact was highlighted by a Federal Court when it ruled against the FTC, noting "the FTC was unable to identify a single illegal merger in the 46-year history of the prior form that the new form would have prevented." The existing framework already provides the Agencies with authority to seek additional information when specific competitive concerns are identified. Expanding the initial filing obligations for all transactions - regardless of competitive risk - would create substantial inefficiencies, impose unnecessary compliance costs, and result in unintended consequences across the broader economy.

This concern is particularly relevant to startups, venture-backed firms, and innovation-driven businesses. America's venture capital and startup ecosystem is fundamentally tied to the existence of efficient and predictable exit pathways, including mergers and acquisitions. For many startups and early-stage firms, acquisition opportunities are a primary mechanism through which investors realize returns, recycle capital into new ventures, and fund the next generation of innovation. For mature small businesses and their owners building durable enterprises for an eventual exit, 43% say a merger or acquisition is important to their business exit strategy, according to the National Small Business Association. Preserving an efficient system that supports the transfer of quality businesses is critical to long-term business growth and the stability of the U.S. economy.

Policies that increase uncertainty, delay transactions, or substantially raise compliance costs can ripple throughout the broader entrepreneurial ecosystem by discouraging investment, productive long-term planning, and reducing incentives for risk-taking.

Acquisition opportunities are not merely transactional outcomes; they are a foundational component of the entrepreneurial ecosystem that incentivizes innovation, supports venture capital formation, encourages long-term investment, and enables startups and small businesses to scale and compete. The ability of small businesses to access capital and tap into strategic partnerships and acquisition opportunities is itself an important feature of a competitive and innovative economy, which makes the United States highly unique and why innovation and successful business growth are so prevalent across our industries.

Force-Multiplier Sectors Need Policy Stability

America's leadership in strategic industries depends heavily on startups, venture-backed firms, and innovation-driven small businesses that rely on efficient capital formation and acquisition pathways to scale breakthrough technologies. Policies that inject friction, delay, or regulatory uncertainty into these ecosystems risk weakening U.S. competitiveness at a time of intense global competition.

In sectors and sub-sectors such as advanced technology and artificial intelligence, biotechnology, manufacturing, aerospace and defense, semiconductors, cybersecurity, energy, and related strategic industries, startups and small businesses often serve as the primary drivers of disruptive innovation. Many firms in these industries rely on external investment, strategic partnerships, and acquisition pathways to obtain the capital, expertise, infrastructure, and distribution capabilities necessary to scale innovative technologies effectively and compete globally.

At a time when the United States faces increasing competitive pressure from China and other foreign competitors that are aggressively supporting strategic industries and emerging technologies, policymakers must avoid imposing unnecessary regulatory barriers that could weaken America's innovation pipeline or slow the commercialization and scaling of transformative technologies developed by U.S. entrepreneurs and small businesses. The Trump Administration is prioritizing key industries such as AI, semiconductors and advanced technology, manufacturing, critical minerals, energy and nuclear power, and key defense sectors, where significant private capital and robust strategic partnerships are needed to boost the capacity and development of projects and innovations across these sectors.

For example, President Trump's Executive Order on strengthening U.S. mineral production specifically "emphasizes the importance of accelerating the flow of private and public investments in U.S. mineral production to enhance domestic supply chains and reduce foreign dependence." Federal regulatory or bureaucratic bottlenecks that impose delays and costs - and impede the flow of capital - are a direct challenge to the President's Executive Order, undermining its important objectives.

Disproportionate Downstream Effects on Startups and Small Businesses

Expanded HSR requirements would disproportionately burden startups and smaller firms that operate with limited resources, compressed financing timelines, and little tolerance for transactional uncertainty. Even modest increases in compliance costs and review delays can disrupt hiring, investment, product development, and long-term growth planning.

The practical consequences of expanded HSR filing obligations extend beyond increased paperwork and legal expense. Longer transaction timelines and expanded premerger review uncertainty can create significant operational and financial challenges for startups, small businesses, and emerging growth firms.

Startups frequently operate under tight financing timelines, limited cash reserves, and rapidly evolving market conditions. Delays associated with expanded filing requirements, prolonged review periods, or uncertainty surrounding information requests may jeopardize financing rounds, impair hiring and expansion plans, disrupt product development cycles, and increase the likelihood that innovative firms lose competitive ground in fast-moving global markets.

In many sectors, timing is critical. Delays in securing strategic investment, completing acquisitions, or integrating complementary technologies can materially affect whether an emerging company successfully scales or survives. Regulatory processes should not unintentionally create barriers that disadvantage innovative American firms competing in highly dynamic global industries.

The Agencies have acknowledged in the Request for Public Comment that they are seeking input regarding whether the burdens associated with revised HSR requirements outweigh the utility of the information collected. From the perspective of startups and small businesses, this concern is substantial and should not be minimized.

Even incremental increases in legal, compliance, and transaction costs matter significantly to smaller firms and entrepreneurial ventures. Again, startups and small businesses operate with limited resources and lean operational structures.

The Agencies should also recognize that regulatory uncertainty itself carries economic consequences. A more expansive, subjective, and burdensome filing process may discourage lawful and pro-competitive transactions, delay investment decisions, and reduce the willingness of investors and entrepreneurs to pursue strategic opportunities. An antitrust system that inadvertently discourages startup investment and innovation risks protecting incumbency rather than competition.

Regulation and Intrusive Paperwork May Undermine Competition and the Administration's Regulatory Reform Agenda

A balanced antitrust framework should promote competition by enabling market dynamism and entrepreneurial growth - not by imposing barriers that disproportionately harm smaller market participants.

Overly burdensome merger review procedures can unintentionally strengthen dominant incumbent firms by making it more difficult for smaller challengers and innovators to scale, attract investment, or successfully exit.

The direction contemplated by this rulemaking appears inconsistent with broader administration-wide efforts to modernize government operations, reduce unnecessary regulatory burdens, improve permitting and approval efficiency, strengthen domestic investment, and reinforce U.S. competitiveness. In his Executive Order "Ensuring Lawful Governance and Implementing the President's Department of Government Efficiency Deregulatory Initiative," President Trump communicated that federal agencies should prioritize the elimination of unnecessary regulations and regulatory initiatives, and restore constitutional limits on administrative power. The Executive Order directs agencies to identify and rescind regulations and proposals that undermine the national interest, including those that "impose undue burdens on small business and impede private enterprise and entrepreneurship." Again, the approach being contemplated via the expansion of premerger notification requirements runs counter to this Executive Order.

Across multiple agencies and policy areas, the administration has emphasized the importance of streamlining government processes, encouraging private-sector investment, accelerating innovation, and ensuring that regulatory frameworks do not unnecessarily impede economic growth or technological advancement. Expanding the HSR process into a significantly broader and more burdensome premerger investigatory framework would move in the opposite direction by increasing compliance complexity, transaction uncertainty, and administrative costs for businesses across the economy.

Regulatory Accumulation Matters to Startups and Small Businesses

Policymakers should carefully assess whether additional procedural requirements meaningfully improve enforcement outcomes or instead add costly friction that weakens the broader entrepreneurial ecosystem.

Even incremental procedural burdens can compound into significant barriers to investment, scaling, hiring, and innovation. Policymakers should carefully evaluate whether proposed changes truly improve antitrust enforcement outcomes or instead create friction that weakens the dynamism of the U.S. entrepreneurial ecosystem.

The Agencies should also avoid policy approaches that appear to presume competitive harm before evidence has been developed. Antitrust enforcement should remain grounded in sound economics, evidence-based analysis, and targeted review of transactions that raise legitimate competitive concerns. The HSR filing process was never intended to function as a broad investigatory proceeding applicable to all transactions irrespective of risk profile.

SBE Council respectfully urges the FTC and DOJ to pursue a balanced and restrained approach that preserves the efficiency and predictability of the HSR system while avoiding unnecessary burdens on startups, small businesses, and emerging growth firms. Any modifications to the HSR form should be narrowly tailored, clearly justified, and focused on improving the Agencies' ability to identify genuinely problematic transactions without imposing sweeping new costs on the broader business community. The Agencies must also strongly consider maintaining the current HSR form and system, as potential changes have not been substantiated with failures, problems or flaws that need to be addressed.

America's leadership in innovation has never been accidental. It is the product of a policy and economic environment that encourages entrepreneurship, rewards risk-taking, attracts investment capital, and allows innovative firms to scale rapidly. Startups and small businesses remain central to America's strength in emerging industries including AI, biotechnology, advanced manufacturing, energy innovation, digital technologies, and all those identified by President Trump as critical to U.S. competitiveness.

The Agencies should take care not to undermine these advantages through unnecessarily expansive procedural requirements that increase uncertainty, delay investment activity, and weaken the acquisition and financing pathways that support innovation and economic dynamism. Preserving a balanced, efficient, and targeted HSR framework is essential not only for sound antitrust enforcement, but also for protecting the competitiveness of the U.S. economy and maintaining America's position as the world's leading hub for entrepreneurship and innovation.

Thank you for the opportunity to comment on this important matter.

Sincerely,

Karen Kerrigan
President & CEO