Below The Threshold, Not Above The Law: FTC Cracks Down On HSR Avoidance

On July 13, 2026, the FTC secured $12 million in penalties from Edwards Lifesciences Corp. and Genesis MedTech Group Limited for failing to make a Hart-Scott Rodino (HSR) filing after structuring a deal to avoid premerger antitrust review. This settlement – the largest ever for this type of violation – paired with recent statements from Federal Trade Commission (FTC) and Department of Justice (DOJ) leadership, sends a clear signal: so-called 'reportability' is dangerous territory where companies need expert guidance. The question of whether a deal should be reported is very fact dependent, and transactions that could be legitimately exempt from the obligations in some circumstances become suspect or worse if perceived as part of an effort to evade it.

The HSR Framework

The HSR Act requires parties to transactions above a size-of-transaction threshold, currently $133.9 million, to file a premerger notification with the FTC and DOJ and observe a waiting period (30 days, extendable by another 30) before closing. 

The Underlying Deal

In July 2024, when the threshold was $119.5 million, Edwards acquired medical device maker JC Medical from Genesis. Edwards paid $115 million for JC Medical plus future milestone payments valued at approximately $1.8 million while separately agreeing to invest $25 million in Genesis in exchange for non-voting securities. The FTC alleged the combined value of these two agreements exceeded the reporting threshold, meaning the transaction should have been reported under the HSR rules.

According to the FTC, Edwards structured the deal this way because it feared an HSR filing would delay closing while it was simultaneously negotiating to acquire JenaValve Technology Inc., JC Medical’s only US competitor for transcatheter aortic valve replacement devices treating aortic regurgitation ("TAVR-AR devices"). The FTC sued to block the JenaValve acquisition, obtaining a preliminary injunction barring the transaction. 

The Settlement

The FTC negotiated a settlement with both companies, and DOJ filed a complaint and proposed final judgment in the US District Court for the District of Columbia. Under the proposed judgment:

• Edwards will pay a $10 million civil penalty;
• Genesis will pay a $2 million civil penalty;
• Edwards must give the FTC 30 days’ advance notice before acquiring any ownership interest in a firm that sells, is testing, or has FDA authorization through an Investigational Device Exemption to test a TAVR-AR device; and
• Edwards must establish and maintain an antitrust compliance program, including a designated compliance officer, employee training, and annual certifications.

Part of a Broader Enforcement Pattern

FTC Chairman Andrew Ferguson called the settlement a warning, stating that "companies that try to sneak deals through without lawful FTC review should take notice." He added that the "FTC will be vigilant in enforcing the requirements of the Hart-Scott-Rodino Act and we will not hesitate to seek penalties for its violation." 

The settlement follows a broader pattern of scrutiny over potential HSR avoidance:

• Acquihires. In January 2026, Ferguson said that the FTC "is beginning to look very closely at how these things work, including determining whether we need to promulgate additional guidance here in the coming months . . . ." Likewise, former Acting Assistant Attorney General for Antitrust Omeed Assefi in March 2026 stated that "when I see conduct that appears aimed to circumvent that process, as a litigator, as an enforcer, that’s more of a red flag to me than if you had just participated and complied with the HSR process." While neither Ferguson nor Assefi suggested that acquihires are inherently problematic, both indicated that such deals will draw close scrutiny to confirm they are not designed to avoid HSR review.
• Document Production. In the final days of the Biden administration, the DOJ sued KKR alleging it "systematically" failed to produce required HSR documents across numerous transactions. That litigation is ongoing.

Key Takeaways

• The FTC and DOJ treat HSR avoidance as a high enforcement priority, whether it takes the form of threshold engineering, acquihires, or incomplete filings.
• Regulators will look past the form of a deal to its economic substance. Side agreements, related investments, or near-simultaneous transactions with the same counterparty can be aggregated for HSR sizing purposes.
• Getting it wrong now costs more than compliance would have. Beyond the $12 million penalty, Edwards now must operate under a compliance program and give the FTC advance notice of future deals in the same product space for the next five years.

Recommended Actions

• Consult antitrust counsel before signing whenever a deal approaches the HSR threshold, especially if it involves related investments, licenses, or side agreements with the same counterparty.
• If your business sits in a concentrated space that has drawn FTC attention (e.g. medical devices, AI/tech talent deals), consider an antitrust compliance check before closing.

What to Watch

• Whether the FTC issues additional guidance on acquihires.
• The outcome of the KKR litigation, which will test both DOJ's "systematic violation" theory and the constitutionality of its per-day penalty calculation.