When a technology company agrees to buy another, the deal often cannot close until US antitrust agencies have had a chance to look at it. This article explains when that notification is required, what it costs in 2026, and where the rules for the form itself stand.
What the Hart-Scott-Rodino Act requires
The Hart-Scott-Rodino Act, usually shortened to HSR, is part of the US Clayton Act (Section 7A). It sets up a premerger notification system. Before certain mergers, acquisitions of voting securities or asset purchases close, the parties file a report with both the Federal Trade Commission (FTC) and the Department of Justice. They then have to wait.
According to the FTC, parties may not close until the HSR waiting period has passed or the government has granted early termination of the waiting period. The FTC’s program page does not state the length of the waiting period, so this article does not either; the statute and the rules set it out.
The point of the system is timing. Reviewing a merger after the companies have already combined staff, products and customer data is hard to undo. A filing gives the agencies a window to ask questions first. A filing is not an approval, and it is not a finding that a deal is harmful. Most reported transactions raise no concern.
Which deals have to be reported?
The FTC describes a sequence of tests. A deal needs a filing only if it passes them and no exemption applies.
- Commerce test. Either party must be engaged in commerce or in activity affecting commerce. Almost any operating technology company meets this.
- Size-of-transaction test. The deal must be worth more than a minimum value. The FTC’s guidance still names the original statutory figures ($50 million), and says they are adjusted every year.
- Size-of-person test. For mid-sized deals, the parties themselves must also meet size requirements.
- Exemptions. Some transactions are excluded even when the numbers are met.
Under the original statutory amounts, the FTC says a deal of $50 million or less needs no filing, a deal above $200 million generally needs one unless an exemption applies, and deals in between depend on the size-of-person test.
The 2026 numbers
Each year the FTC revises the dollar thresholds in line with changes in gross national product. The 2026 update took effect on February 17, 2026, according to the FTC.
| Test | Original statutory figure | 2026 adjusted figure |
|---|---|---|
| Minimum size of transaction | $50 million | $133.9 million |
| Upper transaction level (above this, size-of-person no longer matters) | $200 million | $535.5 million |
| Size-of-person figures listed by the FTC | Not stated on pages reviewed | $26.8 million and $267.8 million |
The FTC’s own notice says the minimum threshold rose from $126.4 million to $133.9 million. That is an increase of $7.5 million, or about 5.9 percent (7.5 divided by 126.4). The adjustment is mechanical: it follows a statutory formula rather than a policy decision about which deals deserve scrutiny.
The two transaction figures move together: $133.9 million divided by $50 million, and $535.5 million divided by $200 million, both come to roughly 2.68. The FTC’s size-of-person figures, $26.8 million and $267.8 million, sit in the same ratio to each other as a $10 million and $100 million pair would, but the pages reviewed do not spell out how the test applies.
Why the size-of-person test exists
Small acquisitions by small companies rarely threaten competition. The size-of-person test screens those out in the middle range of deal values. A $300 million acquisition between two modest firms may fall outside the rule, while the same price paid by a large conglomerate for a small startup is more likely to be reportable. Above the upper level, the test is not applied at all.
What does it cost to file?
The filing fee depends on the value of the transaction and is set by the schedule in effect when the waiting period begins, which the FTC says is in most cases the time of initial filing. The fee schedule is also adjusted annually, using changes in gross national product and the consumer price index, as the 2023 Consolidated Appropriations Act requires.
The FTC’s 2026 schedule, effective February 17, 2026:
| Transaction value | Original fee | 2026 fee |
|---|---|---|
| Under $189.6 million | $30,000 | $35,000 |
| $189.6 million to under $586.9 million | $100,000 | $110,000 |
| $586.9 million to under $1.174 billion | $250,000 | $275,000 |
| $1.174 billion to under $2.347 billion | $400,000 | $440,000 |
| $2.347 billion to under $5.869 billion | $800,000 | $875,000 |
| $5.869 billion or more | $2,250,000 | $2,460,000 |
A worked example
Consider two hypothetical acquisitions. Company A buys a software startup for $300 million. That sits above the $133.9 million minimum and in the $189.6 million to $586.9 million tier, so the fee is $110,000. Because it is below $535.5 million, the size-of-person test would also be applied.
Company B buys a data-infrastructure firm for $1.5 billion. That falls in the $1.174 billion to $2.347 billion tier, so the fee is $440,000. The deal is above the $535.5 million level, so the size-of-person test does not apply, and a filing is needed unless an exemption covers it.
In both cases the fee is small next to the deal price: $110,000 is about 0.04 percent of $300 million, and $440,000 is about 0.03 percent of $1.5 billion. The larger cost for companies is usually legal and preparation work, which no federal page quantifies.
Why is the form itself in dispute?
The HSR form tells the agencies what they need to assess a deal. A new, more detailed form took effect on February 10, 2025. In 2026 it ran into court challenges, and the FTC’s program page records the sequence:
- February 12–13, 2026: A federal district court vacated, meaning set aside, the new form. It stayed its own decision for seven days, which kept the new form in place through February 19.
- February 19, 2026: The Fifth Circuit appeals court granted an administrative stay, so the new form stayed in place for a time.
- March 19, 2026: The appeals court denied the Commission’s motion for a stay pending appeal. The FTC says the district court’s judgment vacating the new form was effective immediately.
- March 20, 2026: The FTC posted the form and instructions that were in place before February 10, 2025, and it began accepting filings on them. The FTC says filers may still voluntarily use the February 2025 form. Tip sheets for the older form followed on March 23.
The FTC page shows no later form notice than March 2026. Readers should check the program page for any newer ruling, since the appeal was pending as of those entries.
The FTC and the Department of Justice also requested public comment on the effectiveness of the HSR premerger reporting requirements on March 25, 2026. What, if anything, they change in response is not yet known from the pages reviewed.
What does this mean for startups and their investors?
For most startups, HSR is a far-off issue. A seed-stage company raising a small round will not meet a $133.9 million threshold. It becomes relevant at exit time, when a larger company wants to acquire the business or a significant stake. Founders who read about how startup funding works from pre-seed to Series A should know that a sale to a large buyer can carry a filing, a fee and a waiting period that need to be built into the deal timeline.
The same applies to public listings. A company that takes the route described in how a US tech IPO works may later use its stock or cash for acquisitions, and then face the same notification test. Acquirers also weigh the cost of waiting against the cash they hold, a calculation that echoes the one in burn rate and runway, where time is money.
Small teams run by one person, as described in solo founders and one-person software companies, are the least likely to hit the thresholds, though a buyer with large assets may still file for an acquisition-sized deal.
What remains uncertain?
- The form. As of the FTC’s March 2026 entries, filers use the earlier form. The result of the appeal is not recorded on the pages reviewed.
- Waiting period details. The FTC pages reviewed do not set out the length of the waiting period, extensions or second requests, so those are left to the statute and the rules.
- Penalties. The pages did not describe civil penalties for failing to file.
- Whether dollar thresholds capture the deals that matter. The thresholds are based on deal value alone. The FTC pages reviewed take no position on whether small deals can still matter competitively, so this article does not either.
Reading a deal announcement with HSR in mind
When a deal is announced, the phrase “subject to regulatory approval” usually includes this process. The practical questions are whether the price crosses the current threshold, which fee tier applies, which form version is in force when the parties file, and whether any exemption fits. The answers are in the FTC’s thresholds page and the program page, and the numbers change each year.
For readers following technology deals, the main lesson is that notification is automatic and number-driven, while scrutiny is a separate and case-specific matter. A filing alone says little about whether a deal will be challenged.
This article is general information, not financial, investment, tax or legal advice.
Sources: Federal Trade Commission
