Divestiture of threshold transactions; review of enforcement-lapse transactions

The Clayton Act (15 U.S.C. 12 et seq.) is amended by inserting after section 7A (15 U.S.C. 18a) the following:

7B.(a)In this section—(1)the term agencies means the Department of Justice, the Federal Trade Commission, the Federal Communications Commission, the Department of Transportation, and the Surface Transportation Board;(2)the term court means any district court of the United States having jurisdiction over parties seeking a declaratory judgment or other relief pursuant to this Act;(3)the term covered period means the period beginning on January 20, 2025, and ending on January 19, 2029;(4)the term enforcement-lapse transaction means any transaction consummated during the covered period that is not a threshold transaction; (5) the term HHI means the Herfindahl–Hirschman Index; (6)the term relevant market has the meaning given the term in the Merger Guidelines U.S. Department of Justice and the Federal Trade Commission issued on December 18, 2023;(7)the term transaction means an acquisition subject to section 7A, including any transaction exempt from the requirements of subsection (c) of that section, during the covered period; and(8)the term threshold transaction means a transaction consummated during the covered period with a value of not less than $10,000,000,000.(b)(1)Beginning on the date that is 180 days after the date of enactment of this section, the parties to a threshold transaction shall—(A)if the transaction was consummated before the date of enactment of this section, complete divestiture of such transaction; and(B)if the transaction is consummated after the date of enactment of this section, hold separate the assets of the merging entities to ensure such assets remain independent, economically viable, and that competition is maintained during the pendency of agency review under subsection (c)(1).(2)The acquiring person and person whose voting securities or assets were acquired may file an action for a declaratory judgment seeking to exempt the threshold transaction from the divestiture requirements under paragraph (1) by demonstrating that all of the following conditions exist:(A)The threshold transaction did not result in—(i)a post-acquisition HHI in excess of 1,800; or(ii)a change in the HHI of greater than 100 in any relevant market;(iii)a market share greater than 30 percent of any relevant market; or(iv)an increase in HHI of more than 100.(B)With respect to any line of business, price increases or quality adjustments were materially consistent with representations made during agency review of the transaction.(C)The threshold transaction was not followed by any significant reduction in output by the post-acquisition entity, as compared to the highest level of combined output by the acquiring person and person whose voting securities or assets were acquired during the 2-year period ending on the date on which the agency began review of the transaction.(D)The threshold transaction was not followed by any significant reduction in employment inconsistent with representations made or omitted during agency review of the transaction.(E)Any divestiture or other condition imposed in connection with the approval of the transaction achieved full and timely compliance without any accusation of circumvention, malicious compliance, or failure of any assets subject to divestiture.(F)No lawyer or law firm involved in the transaction offered or provided pro bono legal services in connection with any settlement or agreement with any reviewing agency or executive branch official.(3)In any proceeding initiated pursuant to subsection (b)(2), the Attorney General of any State shall have an unconditional right of intervention.(c)(1)Not later than 2 years after the date of enactment of this section, the agencies or the Attorney General of any State may conduct a review of any enforcement-lapsed transaction consummated prior to or after the date of enactment of this section to determine whether any of the following conditions existed with respect to the review or clearance of such transaction:(A)Conduct constituting a violation of section 201, 208, or 1001 of title 18, United States Code, or section 7A of this Act.(B)The transaction was cleared, approved, or subject to dismissal, entry of a consent decree, or other final disposition notwithstanding a written recommendation to the contrary by any civil servant in the agency conducting the review, including—(i)to open an investigation into a transaction;(ii)to request additional information and documentary materials;(iii)that a party withdraw a premerger notification and submit a new filing for a transaction;(iv)to challenge a transaction; or(v)to further modify or condition the transaction.(C)The transaction was approved, cleared, or otherwise disposed of without the completion of an investigation following a request for additional information or documentary material under section 7A(e).(D)Any political appointee, registered lobbyist, person acting at the direction or on behalf of the acquiring person and person whose voting securities or assets were acquired, or person with a direct or indirect financial interest in the outcome of such transaction, communicated with any official or employee of the agencies, the Executive Office of the President, or any other Federal agency regarding the review or disposition of such transaction outside of procedures established for public comment or formal party submissions.(E)A material misrepresentation or omission related to the transaction was made to the agency at any point prior to or during the completion of any review of a transaction.(F)The President, or any member of the Cabinet, or head of a Federal agency, made statements—(i)indicating a preference for a particular acquiring person and person whose voting securities or assets were acquired, or outcome in such transaction;(ii)suggesting that commitments, concessions, or promises were sought or obtained from any acquiring person and person whose voting securities or assets were acquired in connection with the review or clearance thereof; or(iii)suggesting that the disposition of such transaction was influenced by considerations unrelated to the competitive effects of such transaction under the antitrust laws.(G)The approval of the transaction was materially influenced by a conflict of interest, improper ex parte communication, or other ethical violation or professional misconduct by any official involved in the review.(H)The acquiring person and person whose voting securities or assets were acquired were represented by any law firm, lobbying firm, or other person that had previously employed a political appointee at a reviewing agency during the 1-year period ending on the date of the appointment.(I)Any foreign government, foreign state-owned enterprise, sovereign wealth fund, or agent of a foreign principal, as defined in section 1(b) of the Foreign Agents Registration Act of 1938, as amended (22 U.S.C. 611(b)), directly or indirectly sought to influence the review, clearance, or disposition of the transaction through any communication with any official or employee of the agencies, the Executive Office of the President, or any other Federal agency.(2)(A)If the reviewing agency determines that there is a reasonable basis to conclude that 1 or more of the conditions described in subparagraphs (A) through (I) of paragraph (1) are met, the agency shall provide written notice to the acquiring person and person whose voting securities or assets were acquired requiring divestiture of any and all transaction assets, including the dissolution of any agreement or venture incidental to the transaction, not later than 30 days after such determination.(B)The divestiture required under subparagraph (A) shall be completed not later than 180 days after the date on which the acquiring person and person whose voting securities or assets were acquired receive the notice under that subparagraph, unless the acquiring person and person whose voting securities or assets were acquired file an action for a declaratory judgment under paragraph (3).(3)The acquiring person and person whose voting securities or assets were acquired may file for an action for a declaratory judgment seeking to exempt the enforcement-lapsed transaction from the divestiture requirements under paragraph (2) by demonstrating to the court by clear and convincing evidence that, as to any condition forming the basis of a notice to divest under paragraph (2), such condition—(A)did not occur; or(B)was so immaterial to any agency action related to the transaction that no reasonable person might consider the condition and agency action related in any way.(4)In any proceeding initiated pursuant to paragraph (3), the Attorney General of any State shall have an unconditional right of intervention.(d)In any action under this section, the identification of the relevant market—(1)shall not require direct evidence or expert witness testimony regarding prices, output, or substitutability; and(2)shall defer to any plausible submarket, which may be adequately defined based on indirect evidence of the boundaries of the relevant market, including practical indicia of market boundaries recognized by the industry, customers or the public, or any potential submarket considered by any agency at the time the transaction was reviewed.(e)(1)All acquiring persons and persons whose voting securities or assets were acquired during the covered period and any counsel, lobbyist, or other agent of the acquiring person and person whose voting securities or assets were acquired shall—(A)preserve any written or oral communication by or on behalf of such acquiring person and person whose voting securities or assets were acquired, including any ephemeral message, by any officer, director, employee, or agent of such acquiring person and person whose voting securities or assets were acquired, or other person, with any officer or employee of the United States related to the transaction;(B)preserve any document and electronically stored information described in rule 34(a)(1)(A) of the Federal Rules of Civil Procedure related to the transaction; and (C) take all steps necessary to prevent the destruction, loss, or alteration of any such document, electronically stored information, communication, and other data or information generated by or stored on the a computer, mobile device, or storage media of an acquiring person and person whose voting securities or assets were acquired. (2)If a party fails to comply with paragraph (1), in any proceeding before a court relating to the transaction, the court shall—(A)instruct the factfinder to draw an adverse inference that the evidence that was not preserved would have been unfavorable to the party that failed to preserve such evidence;(B)sanction counsel and executives to the extent they knew or should have known their actions or inactions would cause such failure; and(C)make criminal referrals to the extent such failure is a violation of section 1512(c) of title 18, United States Code.(3)Any records preserved pursuant to this subsection shall be made available to the attorney general of any State upon request.(f)(1)If the acquiring person and person whose voting securities or assets were acquired fail to complete divestiture pursuant to subsection (b)(1) or (c)(2) before the date that is 90 days after the date on which the divestiture is required to be completed, the court shall appoint, or a reviewing agency shall move a court to appoint, an independent divestiture trustee with the authority to effect the sale of assets on such terms as the trustee determines are reasonable, subject to court approval.(2)If a court finds that any person knowingly violated the requirements of subsection (b)(1) or (c)(2), the court may—(A)impose a civil penalty not to exceed the greater of—(i)$100,000 each day during which such violation persists; or(ii)5 percent of the total value of the transaction;(B)impose against the chief executive officer and board members of any entity resulting from the transaction, a civil penalty not more than $100,000 each day during which such violation persists; and(C)impose any other monetary or equitable relief, or initiate a contempt proceeding or criminal referral that the court, in its discretion, determines is necessary to effectuate compliance with the requirements of this Act.(3)If the court finds that the failure to divest pursuant to subsection (b)(1) or (c)(2) was knowing, the court may award damages in an amount equal to 3 times the value of the commercial benefit derived by the parties from the continued operation of the assets subject to divestiture during the period of noncompliance.(4)If the agencies have probable cause to believe that any person has violated section 201, section 208, or section 1001 of title 18, United States Code, in connection with the review or approval of a transaction, the Attorney General shall appoint a special counsel to investigate and, if warranted, prosecute such violations.(g)(1)Except as provided in paragraph (2), in any action by an acquiring person and person whose voting securities or assets were acquired for declaratory judgment, as to any threshold or enforcement-lapse transaction, structural relief, including divestiture, dissolution, or rescission, shall be the presumptive remedy for restoring competition in any relevant market.(2)The court may order additional remedies, including the disgorgement of any gain attributable to the transaction, only upon a finding supported by clear evidence that—(A)a divestiture is physically or technologically impossible; or(B)any other remedy would not fully and effectively restore competition.