A US District Court in Tyler, Texas, has granted a preliminary injunction against expanded pre-merger disclosure requirements introduced by the Federal Trade Commission and the US Department of Justice.
The rule, finalised in 2024 under amendments to the Hart-Scott-Rodino Antitrust Improvements Act, would have required companies to provide substantially more detailed information when filing for regulatory approval of mergers and acquisitions. This included expanded data on competitive overlaps, ownership structures, and prior acquisitions.
In his ruling, Judge Jeremy Kernodle said the FTC had not adequately demonstrated that the benefits of the expanded requirements would outweigh their compliance costs. The court held that the agency had exceeded its statutory authority in adopting parts of the rule.
The case was brought by the US Chamber of Commerce, which argued that the changes imposed excessive burdens on dealmakers and effectively created an additional regulatory barrier to transactions. The Chamber described the rule as an “onerous merger tax” in its legal challenge.
The FTC said it was reviewing the decision and considering its next steps. The agency had argued that broader disclosure was necessary to detect anticompetitive transactions more efficiently and to reduce the need for lengthy follow-up investigations.
The blocked rule had already influenced deal activity. Companies accelerated filings ahead of its original implementation timeline, seeking to avoid the expanded information requirements. The preliminary injunction now suspends those additional obligations while the case proceeds.
The ruling arrives amid sustained efforts by US antitrust authorities to increase oversight of consolidation, particularly in sectors characterised by high market concentration. Expanded Hart-Scott-Rodino disclosures were positioned as a structural reform designed to modernise the pre-merger review process.
However, the decision reflects a broader judicial reassessment of administrative agency powers. Courts in recent years have scrutinised whether regulators have remained within the boundaries set by Congress when introducing new rules with material economic impact.
For corporate counsel and transaction advisers, the immediate effect is a pause on compliance changes that would have required additional documentation, internal analysis, and disclosure preparation during the deal process. Longer term, the FTC may appeal or seek to revise the rule to address the court’s concerns.
The outcome will be closely watched by US and international dealmakers. Disclosure obligations are a critical component of transaction timelines, cost modelling, and execution risk. Any recalibration of agency authority over merger filings could influence how future antitrust reforms are designed and defended in court.
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