Below the Threshold: Serial Acquisitions and the Limits of Hart–Scott–Rodino Reform

Writer: JD Draughon

Article Editor: Aidan Larkin

Associate Editors: Claire Lowenstein & Kelsie Fernandez

Market competition can be diminished not only by one blockbuster merger, but by a buyer who repeatedly acquires smaller competitors.¹ The term “roll-up” describes a company partaking in these serial acquisitions in the same or adjacent market space.² Many roll-ups are executed through a series of small transactions that fall below the Hart–Scott–Rodino (HSR) reporting thresholds, so they are nonreportable and evade premerger review until consolidation has already occurred. Enacted in 1976, the Hart–Scott–Rodino Act was created to aid enforcement of antitrust law by requiring premerger notifications to be submitted to the Federal Trade Commission (FTC) and Department of Justice (DOJ) before a transaction is finalized. This is alarming, as the deal-by-deal process under Hart–Scott–Rodino allows many smaller acquisitions to go unscreened, even if the series of deals changes market structure.³ The FTC and DOJ acknowledge this and have flagged the screening of roll-ups as a priority to try and prevent negative competition changes that are not apparent under one transaction alone.⁴ While recent changes to the Hart–Scott–Rodino Antitrust Improvements Act of 1976 have adjusted reporting thresholds and requirements for premerger notification, they still trigger the review only when a deal is reportable.⁵ Although the scrutiny of deals exceeding HSR thresholds may improve, serial acquisitions that never surpass those thresholds remain nonreportable and effectively escape premerger review. Targeted reforms in HSR that focus on roll-up patterns and serial acquisitions would allow enforcement officers to detect and evaluate these situations before the competition is already diminished.⁶

This avoidance often occurs through non-reportable acquisitions under the $133.9 million HSR threshold (updated annually), which generally do not require HSR filings.⁷ HSR requires transactions made over this limit to be reported before closing to allow regulators to review them.⁸ Acquisitions under this threshold are often invisible, and even when detected retroactive enforcement is a challenge as the evidence gets muddier, integration occurs, and unwinding transactions is costly and rare.⁹ The healthcare industry shows this issue firsthand through repeated small acquisitions that can change market structure and affect spending and utilization.¹⁰ These effects matter because regulators often notice these patterns after firms are already integrated, making the transactions harder to unwind.¹¹

A key feature of the HSR framework is its relationship with Section 7 of the Clayton Act. Section 7 provides the substantive legal standard, while HSR functions as the screening mechanism that determines which deals receive premerger review.¹² The various strategies firms use during roll-up acquisitions can be seen when one separates what antitrust law forbids from what HSR is designed to screen.¹³ Under Section 7 of the Clayton Act, acquisitions are unlawful where the effect “may be substantially to lessen competition,” or “tend to create a monopoly.”¹⁴ The word “may” shows that merger law is in place to catch harmful consolidation early on before the markets tip.¹⁵ These competitive boundaries are also reviewed within a “line of commerce” and “section of the country” which can apply to local markets where roll-ups commonly occur.¹⁶ Even when individual deals appear modest, these repeated small acquisitions can lead to the exact consolidation that Section 7 is meant to prevent.¹⁷ Detecting these trends early is different from recognizing them, and that is where HSR becomes the practical gatekeeper.¹⁸

In roll-ups, individual acquisitions are commonly below the HSR threshold, which can hide the pattern from agencies until after the roll-up is built.¹⁹ The Hart–Scott–Rodino Act requires parties to disclose certain transactions to regulators while they observe competition effects before the waiting period closes.²⁰ The timing of this disclosure is critical as it is significantly easier to break down a deal before integration than to dismantle it after the fact.²¹

Private equity acquisitions of physician practices provide one concrete example as consolidation can diminish competition even when acquisitions occur one practice at a time.²² By purchasing one clinic or practice at a time, a buyer can reshape the market producing a substantial combined effect while the individual footprints appear limited.²³ Limited empirical evidence suggests that certain healthcare practice acquisitions have been linked to price increases and sometimes changes in the utilization of healthcare services, indicating that the competitive effects of consolidation are not only theoretical.²⁴ This is the exact structural change that Section 7 is designed to address but struggles to do with the way oversight is structured.²⁵ The solution is not to individually review every transaction, but to structure HSR in a way that flags repeat-acquisition strategies, giving regulators a path to enforcement while the course of action is still feasible.²⁶

With new HSR disclosure reforms only operating when a transaction is filed, the remaining gap is found within repeat acquisitions that never trigger HSR at all.²⁷ A long-term solution to this issue is a series-based trigger that acknowledges repeat acquisitions within a line of commerce as a pattern, not isolated transactions.²⁸ Following this approach, a buyer who purchases a specific count or cumulative-value threshold within a period of time would have future deals brought into the HSR process. This solution would allow for visibility even if the buyer stays below the threshold while continuing to consolidate market power through aggregation.²⁹ Limiting the trigger to situations where these conditions are met would prevent HSR from becoming a blanket reporting regime for every single transaction.³⁰ 

The obvious objection to this would be inflated costs and administrative burdens, but the design features that make the trigger narrow are the same features that may keep it administrable.³¹ A substantial increase in filings would lead to more legal spending and additional compliance burden in the form of time and outside counsel and in-house personnel cost.³² Commentators argue that the expanded HSR requirements are wasteful and burdensome among transactions in manifestly competitive markets, however, this argument relies on the trigger being blunt and does not address the issue that roll-up patterns can diminish competition through consolidation without ever creating a filing.³³

The reform focuses on buyers and patterns, rather than broadly reviewing every small deal.³⁴ Limiting the trigger to focus on a time window, cumulative value, and line of commerce keeps HSR oversight manageable while increasing visibility in areas that it is needed.³⁵ If the goal is to prevent consolidation and protect competition, the review needs to take place before the roll-up has been assembled and normalized.³⁶ This timing aligns with Section 7, which stops mergers that “may” lessen competition, not those which already have.³⁷ With that, the principle is that screening mechanisms cannot remain purely transactional if the goal is to protect competition from market consolidation.³⁸

Section 7 of the Clayton Act considers whether a transaction “may” lessen competition and, within the current framework, HSR structure makes enforcement hinge on whether a transaction passes a certain threshold for review.³⁹ The concern is not one blockbuster deal but rather roll-ups consolidating in ways that reshape market structure, because these patterns can show up in spending and utilization.⁴⁰ Recent reforms help regulators enforce roll-up strategies when a filing happens but they do not solve the issue of repeat acquisitions that never trigger HSR review in the first place.⁴¹ A narrow series-based trigger would allow regulators to have visibility over related acquisitions as a consolidation strategy rather than isolated deals.⁴² If antitrust law is supposed to prevent mergers from transactions that may harm competition, it is essential for regulators to have the ability to operate early so they can actually enforce change.⁴³

1.  Federal Trade Commission & U.S. Department of Justice, FTC and DOJ Seek Info on Serial Acquisitions, Roll-Up Strategies Across the U.S. Economy (May 2024), http://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-doj-seek-info-serial-acquisitions-roll-strategies-across-us-economy. ↩︎
2. Federal Trade Commission & U.S. Department of Justice, Request for Information for Public Comment on Corporate Consolidation Through Serial Acquisitions and Roll-Up Strategies 1 (May 2024). ↩︎
3. Thomas G. Wollmann, Stealth Consolidation: Evidence from an Amendment to the Hart–Scott–Rodino Act, 1 Am. Econ. Rev.: Insights 77, 77–78 (2019). ↩︎
4. Federal Trade Commission & U.S. Department of Justice, supra note 1. ↩︎
5.  Premerger Notification; Reporting and Waiting Period Requirements, 89 Fed. Reg. 89, 216 (2024). ↩︎
6. Organisation for Econ. Co-operation & Dev. [OECD], Serial Acquisitions and Industry Roll-Ups 23 (2023). ↩︎
7. Federal Trade Commission, FTC Announces 2026 Update to Jurisdictional and Filing Fee Thresholds for Premerger Notification Filings (Jan. 2026), https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-announces-2026-update-jurisdictional-filing-fee-thresholds-premerger-notification-filings; 15 U.S.C. § 18a(a)(2) (2022). ↩︎
8. 15 U.S.C. § 18a(a)(2) (2022). ↩︎
9. William J. Baer, Reflections on Twenty Years of Merger Enforcement Under the Hart–Scott–Rodino Act, 65 Antitrust L.J. 825, 830 (1997). ↩︎
10. Yashaswini Singh et al., Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization, 3 JAMA Health Forum e222886, at 1–2 (2022). ↩︎
11. Baer, supra note 9, at 830. ↩︎
12. 15 U.S.C. § 18; 15 U.S.C. § 18a. ↩︎
13. Baer, supra note 9, at 825–27. ↩︎
14. 15 U.S.C. § 18. ↩︎
15. 15 U.S.C. § 18 (prohibiting acquisitions the effect of which “may be substantially to lessen competition, or to tend to create a monopoly”). ↩︎
16. 15 U.S.C. § 18; U.S. Dep’t of Just. & Fed. Trade Comm’n, Merger Guidelines (2023); Singh et al., supra note 10, at 1. ↩︎
17. Thomas G. Wollmann, How to Get Away with Merger: Stealth Consolidation and Its Effects on US Healthcare 2 (Nat’l Bureau of Econ. Rsch., Working Paper No. 27274, May 2020, revised Mar. 2024). ↩︎
18. Baer, supra note 9, at 825, 848. ↩︎
19. 15 U.S.C. § 18a(a)(2); Wollmann, How to Get Away with Merger, supra note 17, at 2. ↩︎
20. 15 U.S.C. § 18a(a)–(b). ↩︎
21. Baer, supra note 9, at 830. ↩︎
22. Singh et al., supra note 10, at 2. ↩︎
23. Id. ↩︎
24. 15 U.S.C. § 18 (2022); Singh et al., supra note 10, at 1. ↩︎
25. 15 U.S.C. § 18 (2022). ↩︎
26. OECD, supra note 6, at 23. ↩︎
27. Premerger Notification; Reporting and Waiting Period Requirements, 89 Fed. Reg. 89,216 (2024) ↩︎
28. OECD, supra note 6, at 26. ↩︎
29. OECD, supra note 6, at 26 (2023). ↩︎
30. Baer, supra note 9, at 847–48. ↩︎
31. OECD, supra note 6, at 25–26. ↩︎
32. Premerger Notification; Reporting and Waiting Period Requirements, 89 Fed. Reg. 89,216, 89,333–34 (2024). ↩︎
33. Id. at 89,315–16. ↩︎
34. OECD, supra note 6, at 25. ↩︎
35. OECD, supra note 6, at 26. ↩︎
36. Baer, supra note 9, at 830. ↩︎
37. 15 U.S.C. § 18 (2022); Baer, supra note 9, at 826–27. ↩︎
38. Thomas G. Wollmann, Stealth Consolidation: Evidence from an Amendment to the Hart–Scott–Rodino Act, 1 Am. Econ. Rev.: Insights 77, 77–78 (2019); Fed. Trade Comm’n & U.S. Dep’t of Just., supra note 1. ↩︎
39. 15 U.S.C. § 18 (2022); 15 U.S.C. § 18a(a)(2) (2022). ↩︎
40. Singh et al., supra note 10, at 1, 8; Wollmann, supra note 3, at 77-78. ↩︎
41. Premerger Notification; Reporting and Waiting Period Requirements, 89 Fed. Reg. 89,216 (2024). ↩︎
42. OECD, supra note 6, at 22, 25. ↩︎
43. 15 U.S.C. § 18 (2022); Baer, supra note 9, at 832. ↩︎