[Billing Code 6750-01 P]

FEDERAL TRADE COMMISSION

16 CFR Parts 801, 802 and 803

Premerger Notification; Antitrust Improvements Act Notification and Report Form

AGENCY: Federal Trade Commission.

ACTION: Final rule.

SUMMARY: This final rule amends 16 CFR 803 Appendix, the Antitrust Improvements Act Notification and Report Form ("Form") which must be completed and submitted by persons required to report mergers and acquisitions pursuant to section 7A of the Clayton Act, as added by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act'). The telephone number for the Bureau of the Census appearing on the Instructions in the Interim Rules (66 FR 23561) will be deleted as this telephone number is no longer referenced on the Bureau of the Census web page. Persons requiring information on NAICS should refer to the Census web page at www.census.gov. Otherwise, this final rule implements the Interim Rules as published on May 9, 2001. DATE: This final rule is effective July 1, 2001.

FOR FURTHER INFORMATION CONTACT: Marian R. Bruno, Assistant Director, or Alice M. Villanvincencio, Compliance Specialist, Premerger Notification Office, Bureau of Competition, Room 301, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. Telephone (202) 326-3100.

SUPPLEMENTARY INFORMATION

Discussion of Comments

On May 9, 2001, the Commission published Interim Rules amending the Form, and Insurance Appendix contained in 16 CFR Part 803, and amending the Rules, 16 CFR Parts 801 and 802 (66 FR 23561). The Interim Rules solicited public comments regarding the effective date of July 1, 2001.

The Commission received three public comments. The first comment, dated May 25, 2001, was submitted by Nortel Networks, Inc. (Mary M. Cross and Monica L. Lester). This comment asserts that the July 1, 2001, effective date causes a burden for larger "calendar year" companies, such as Nortel, to comply with a midyear effective date and that a January 1, 2002 effective date is more efficient. The comment explains that the company will have difficulty in compiling data on the revenues generated by its products and in classifying its 1997 and 2000 revenues to the NAICS because Nortel operates various lines of businesses and reports revenue information on a calendar-year basis. It anticipates that other larger companies may have similar experiences during the transition. The second comment, dated June 7, 2001, was submitted by Emerson Electric Company (Richard J. Schlueter). This comment suggests that the Commission postpone the effective date, or in the alternative, that the Commission allow an unspecified grace period, permitting larger companies to submit revenue data using either the SIC or the NAICS while making the transition.

The third comment, dated May 16, 2001, was submitted by Taft, Stettimus, & Hollister LLP (Thomas C. Hill) and did not address the effective date of these amendments. Comment three recommends that the dollar threshold in Item 8 be raised. This comment will remain under consideration and may be addressed by future rulemaking.

The sparse number of comments leads the Commission to conclude that the vast majority of persons filing notification are able and ready to report revenue data using the NAICS. The Commission concludes that an effective date of July 1, 2001, remains appropriate.

Regulatory Flexibility Act

The information required by the amended Form is substantially the same as the information elicited on the current Form. The only difference is that filing persons will be required to report revenue data using the NAICS instead of the SIC in Items 5, 7, and 8. The change in base year simply requires that filing persons use data from the "1997 Economic Census" rather than data from the "1992 Economic Census." The ministerial changes clarify or simplify existing practices.

The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires that the agency conduct an initial and final regulatory analysis of the anticipated economic impact of the proposed amendments on small businesses, except where the agency head certifies that the regulatory action will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 605. Because of the size of the transactions necessary to invoke a Hart-Scott-Rodino filing,(1) the premerger notification rules rarely, if ever, affect small businesses. The recent amendments to Section 7A of the Clayton Act and the Commission's implementing rule amendments were intended to reduce the burden of the premerger notification program by exempting all transactions valued at $50 million or less.

Furthermore, most federal statistical agencies have adopted the NAICS since 1997. Accordingly, many companies that currently file HSR notifications have submitted economic information to the Bureau of the Census using the NAICS codes since 1997. For these filing persons, reporting base year revenue data classified under the NAICS should present little difficulty. For persons that do not have base year revenue data coded under the NAICS, the delayed effective date of the amendments to the Form should have provided sufficient time to convert their SIC data to the NAICS format with minimal burden. Finally, potential filers have always been required to provide base year data from the most recent Economic Census since the inception of the Form in 1978.

In light of the foregoing, the Commission certifies that the amendments to the Form will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612. Thus, neither an initial nor a final regulatory flexibility analysis of this revision is required. 5 U.S.C. 605. This document serves as the required notice of this certification to the Small Business Administration.

Paperwork Reduction Act

The Commission's revisions to the Form do not "substantive [1y] or material[ly] modify" the existing terms of the currently approved collection of information (OMB Control Number 3084-0005) to necessitate OMB's further review and approval. See 44 U.S.C. 3507(h)(3); 5 CFR 1320.5(g).

List of Subjects

16 CFR Parts 801, 802, and 803

Antitrust, Business and Industry, Reporting and recordkeeping requirements.
 
Accordingly, for the reasons stated in the preamble, the Commission adopts as final the Interim Rule amending 16 CFR Parts 801, 802, and 803, which was published at 66 FR 23561, on May 9, 2001, with the following change:

PART 803-TRANSMITTAL RULES

1. The authority citation for Part 803 continues to read as follows:
 
Authority: 15 U.S.C. 18a(d).
 
2. Amend the Appendix to Part 803 by revising page I of the Instructions to the Antitrust Improvements Act Notification and Report Form for Certain Mergers and Acquisitions to read as follows:

ANTITRUST IMPROVEMENTS ACT
NOTIFICATION AND REPORT FORM
for Certain Mergers and Acquisitions

INSTRUCTIONS

GENERAL

The Answer Sheets (pp. 1-15) constitute the Notification and Report Form ('the Form") required to be submitted pursuant to § 803.1 (a) of the premerger notification rules ('the rules"). Filing persons need not, however, record their responses on the Form.

These instructions specify the information which must be provided in response to the Items on the Answer Sheets. Only the completed Answer Sheets, together with all documentary attachments, are to be filed with the Federal Trade Commission and the Department of Justice.

Persons providing responses on attachment pages rather than on answer sheets must submit a complete set of attachment pages with each copy of the Form.

The term "documentary attachments" refers to materials supplied in responses to Item 3(d), Item 4 and to submissions pursuant to §§ 803.1 (b) and 803.11 of the rules.

Information-The central office for information and assistance concerning the rules, 16 CFR Parts 801-803, and the Form is Room 303, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, phone (202) 326-3100.

Definitions-The definitions and other provisions governing this Form are set forth in the rules, 16 CFR Parts 801-803. The governing statute, the rules, and the Statement of Basis and Purpose for the rules are set forth at 43 FR 33450 (July 31, 1978), 44 FR 66781 (November 22,1979) 48 FR 34427 (July 29,1983) and Pub. L. No. 106-533, 114 Stat. 2762.

Affidavit-Attach the affidavit required by § 803.5 to page 1 of the Form. Affidavits are not required if the person filing notification is an acquired person in a transaction covered by § 801.30. (See § 803.5(a)).

Responses-Each answer should identify the Item to which it is addressed. Use the reverse side of the corresponding answer sheet or attach separate additional sheets as necessary in answering each Item. Each additional sheet should identify at the top of the page the Item to which it is addressed. Voluntary submissions pursuant to § 803.1 (b) should also be identified.
Enter the name of the person filing notification appearing in Item 1(a) on page 1 of the Form and the date on which the Form is completed at the top of each page of the Form, at the top of any sheets attached to complete the response to any Item, and at the top of the first or cover page of each documentary attachment.

If unable to answer any Item fully, give such information as is available and provide a statement of reasons for non-compliance as required by § 803.3. If exact answers to any Item cannot be given, enter best estimates and indicate the sources or bases of such estimates. Estimated data should be followed by the notation, .est." All information should be rounded to the nearest thousand dollars.

Year-All references to 'year' refer to calendar year. If the data are not available on a calendar year basis, supply the requested data for the fiscal year reporting period which most nearly corresponds to the calendar year specified. References to "most recent year" mean the most recent calendar or fiscal year for which the requested information is available.

North American Industry Classification System (NAICS) DataThis Notification and Report Form requests information regarding dollar revenues and lines of commerce at three levels with respect to operations conducted within tile United States. (See § 8032(c)(1).) All persons must submit certain data at the 6-digit NAICS national industry code level. To the extent that dollar revenues are derived from manufacturing operations (NAICS Sectors 31-33), data must also be submitted at the 7-digit NWCS product class and 1 MIgit NAICS product code levels. The term "dollar revenues' is defined in § 803.2(d).

References-In reporting information by 6-digit NAICS industry code refer to the North American Industry Classification System - United States, 1997 (1997 NAICS Manual) published by the Executive Office of the President, Office of Management and Budget. In reporting information by 7-digit NAICS product class and 10-digit NAICS product code refer to tile 1997 Numerical List of Manufactured and Mineral Products (EC97M31 R-NQ published by the Bureau of the Census. Infomnation regarding NAICS also is available at www.census.gov.
Privacy Act Statement-Section 18a(a) of Title 15 of the U.S. Code authorizes the collection of this information. The primary use of this information is to determine whether the merger or acquisition reported in the Notification and Report Form may violate the antitrust laws. Furnishing the information on the Form is voluntary. Consummation of an acquisition required to be reported by the statute cited above without having provided this information may, however, render a person liable to civil penalties up to $11,000 per day.

Instructions to FTC Form C4 (rev. 07/01/01)

By direction of the Commission.

Donald S. Clark
Secretary

DATE: Approved by the Commission on June 28, 2001

1. As noted in the Commission's recent publication of interim rules amending the premerger notification rules, the increase in reporting threshold from $15 million to $50 million has significantly reduced the number of acquisitions affected by the premerger notification program. See 66 FR 8680, 8687 (February 2, 2001).