• DOJ And FTC Extract Record $12 Million In Civil Penalties For Failing To Submit An HSR Filing

  08/04/2026

  On July 13, 2026, the U.S. Department of Justice Antitrust Division and the Federal Trade Commission (the “Agencies”) filed a complaint and lodged a proposed final judgment in the U.S. District Court for the District of Columbia, looking to resolve allegations that a global medical-device manufacturer (“Buyer”) and a Singapore-based medtech group (“Seller”) (collectively “Defendants”) deliberately structured a $115 million acquisition to evade the notification and waiting-period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”).  The complaint sought penalties for failure to file, and the proposed consent decree, which remains subject to court approval, imposes a combined $12 million penalty, the largest ever for failing to make an HSR filing.  United States v. Edwards Lifesciences Corp. & Genesis MedTech Group Ltd., No. 1:26-cv-02450 (D.D.C. July 13, 2026).

  The subject of the transaction was a medical device company (“Target”), which was in clinical trials for a treatment for severe aortic regurgitation known as a transcatheter aortic valve replacement for aortic regurgitation (“TAVR-AR”).  On July 22, 2024, Buyer acquired Target for $115 million plus milestone payments, and on August 9, 2024, acquired $25 million in non-voting shares of Seller.  The Agencies alleged that the $25 million investment was, in substance, additional consideration for Target which, when aggregated with the $115 million payment, would have exceeded the then-in-effect $119.5 million HSR size-of-transaction threshold, rendering the acquisition reportable.

  The HSR Act requires the buyer and seller in qualifying transactions to notify the Agencies before closing and to observe a statutory waiting period, giving the Agencies an opportunity to investigate potentially anticompetitive deals before they are consummated.  The Agencies proceeded under the anti-evasion rule, 16 C.F.R. § 801.90, which provides that “[a]ny transaction(s) or other device(s) entered into or employed for the purpose of avoiding” HSR obligations “shall be disregarded, and the obligation to comply shall be determined by applying [the HSR Act] to the substance of the transaction.”  Under that rule, the Agencies must show both a purpose to avoid the filing obligation and that the substance of the transaction crossed the reporting threshold.

  To establish intent, the complaint cited emails and testimony indicating that Buyer was concerned HSR review would delay closing, particularly given its concurrent negotiations to acquire Target’s only rival in TAVR-AR.  The Agencies pointed to April 27, 2024 term sheets that described the components as one transaction, and to Buyer’s assurance to Target’s rival that there was no HSR review because its acquisition of Target was “below the threshold! Intentional[.]”  Relatedly, the Buyer did submit an HSR filing for its separate $945 million acquisition of Target’s rival, which the Agencies successfully blocked.  After the FTC challenged that deal in August 2025, the U.S. District Court for the District of Columbia granted a preliminary injunction following a six-day trial in January 2026, prompting Buyer to abandon the acquisition.  See Federal District Court Grants Preliminary Injunction Blocking Pre-Commercial Heart Valve Acquisition, A&O Shearman Antitrust Litig. Blog (Feb. 3, 2026), available at https://www.lit-antitrust.aoshearman.com/federal-district-court-grants-preliminary-injunction-blocking-pre-commercial-heart-valve-acquisition.

  Neither Buyer nor Seller admitted liability.  The proposed final judgment was entered by consent, without trial or adjudication of any issue of fact or law, and expressly states that it does not constitute an admission or finding of wrongdoing.

  The settlement orders Buyer to pay $10 million and Seller to pay $2 million.  For a five-year term, Buyer must give the FTC at least thirty days’ advance written notice before acquiring any interest in a company that sells, is in U.S. clinical trials for, or holds an FDA Investigational Device Exemption for a TAVR-AR device, and must implement an intensive antitrust compliance program.  The Agencies also retain broad inspection rights over Buyer’s records and personnel.

  The settlement is notable beyond the monetary penalty imposed.  It is only the second anti-evasion action the Agencies have brought under 16 C.F.R. § 801.90 in the twenty-first century. The last, in 2019, yielded a $5 million penalty split equally between buyer and seller.  The $12 million penalty here reflects both a record sum and an unequal allocation weighted toward Buyer.  Even so, the $12 million represents roughly 16% of the approximately $77 million in maximum penalties the Agencies could have sought given the penalty could have been up to $53,088 per day over 721 days of alleged violation.

  Categories: Federal Trade Commission,  Merger Control
  

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• UNITED STATES V. EDWARDS LIFESCIENCES - PROPOSED FINAL JUDGEMENT