Counterfactual host Kirsten Cirella is joined by Dan Rosenthal of Kirkland & Ellis to unpack the rapidly shifting U.S. merger enforcement landscape and what it means for Canadian businesses and counsel navigating cross-border transactions. They discuss changing federal enforcement priorities, the HSR rulemaking saga, emerging filing issues, and the growing role of state attorneys general.
In this episode of Counterfactual, Kirsten Cirella speaks with Dan Rosenthal, a partner in the Washington, D.C. office of Kirkland & Ellis, about the evolving U.S. merger enforcement environment. They trace the expanded 2025 HSR rules, their subsequent vacatur and the ongoing litigation, and the FTC and DOJ request for information reconsidering what should be required at the filing stage. The discussion also explores how potential changes involving longstanding HSR exemptions, sovereign wealth funds, and foreign-government affiliations could affect cross-border deal planning. Finally, Dan explains the growing role of state attorneys general, including recent divergence from federal enforcers and the emergence of state “mini-HSR” notification regimes.
This episode was recorded on May 27, 2026, and the discussion reflects the U.S. merger enforcement landscape as of that date.
Kirsten Cirella: Welcome to Counterfactual, the Canadian Bar Association's competition law podcast. I'm Kirsten Cirella, an associate in the Competition and Foreign Investment Group at Stikeman Elliott in Toronto, and I'll be your host today. Today, we are looking south of the border at a particularly interesting moment in U.S. antitrust enforcement and asking what it means for Canadian practitioners and businesses involved in cross-border transactions. Joining me today is Dan Rosenthal, a partner in the Washington, D.C. office of Kirkland & Ellis. Dan advises clients on complex merger investigations in cross-border transactions involving multiple merger clearance requirements, and also regularly advises on HSR Act issues. And with that, let's get into today's episode. Daniel, thank you very much for joining us today.
Daniel Rosenthal: Oh, it's so great to be here. Thanks for inviting me.
Kirsten Cirella: Of course. So I was thinking perhaps we can start at a high level with the current U.S. enforcement environment. So for Canadian listeners who follow U.S. antitrust developments but don't live with them day to day, how would you describe the current state of U.S. merger enforcement?
Daniel Rosenthal: Yeah. More generally, the overall political landscape is in a bit of a state of transition. I think every time there's a change in administrations, even between administrations of the same party, there are going to be different priorities and different areas of focus. In my mind - and there may be others - there are four key areas of note under the current second-term Trump administration's antitrust regime. The first is a return to a willingness to settle merger investigations. Under the prior Biden administration, there was a real resistance to entering into settlement discussions. Lina Khan indicated that if a transaction was problematic or anticompetitive, the agencies would want to litigate it rather than save a problematic transaction based on incremental changes. What the current antitrust leaders in the U.S. have said is that they are willing to enter into appropriate settlement discussions. So a transaction that has issues that need to be resolved could still potentially be saved through a settlement. That's a big difference. In the past, parties and counsel would regularly try to remedy a transaction before it reached the agencies. That can still happen, but it's no longer the case that you necessarily have to come up with a solution before entering discussions with U.S. regulators. Another key theme concerns the 2023 Merger Guidelines, which were put into force under the Biden administration and described the agencies' approach to assessing whether a transaction is potentially problematic. Those guidelines expanded the theories of harm the agencies were considering. The agencies would say that was consistent with how U.S. courts look at mergers. In practice, however, practitioners generally viewed the guidelines as an expansion in how the antitrust authorities were looking at competitive harm. Under the current administration, there has been more of a return to a traditional approach to assessing transactions and competitive harm.
Kirsten Cirella: So you feel like they're not applying the Merger Guidelines quite as rigidly?
Daniel Rosenthal: Yeah. The 2023 Merger Guidelines are still in force. There has been no statement saying that those guidelines are not indicative of the agencies' approach to assessing mergers. However, I think in practice, the focus has been more on what traditionally parties would consider to be the core potential risks for a transaction.
Kirsten Cirella: So maybe not focusing as much on the structural presumptions in those guidelines?
Daniel Rosenthal: That's exactly right. Under the Merger Guidelines, there was more of a focus on impacts in areas such as labour markets and the broader ecosystem of anticompetitive effects. That is not to suggest those issues are no longer part of the analysis, but they do not appear to be as central a focus of the current administration. The other two areas - and I know we're going to get into the next one in more detail - include the HSR form, which is in somewhat of a state of limbo currently. It was updated and greatly expanded at the start of 2025. We'll talk in more detail about it, but a federal court has vacated those new rules. So we're back to the old, more narrow HSR form, which has a significant impact on how parties present data and information to regulators at the outset. So that's a big change. And then lastly, and I think we're going to talk about this a little bit more, but there has been a rise in state attorney general enforcement. And so, that's always been a possibility. That's not a new law or something that's been passed, but the potential for divergence between the federal merger enforcers and state AGs in terms of how they view a transaction and whether it's anticompetitive, that's become a bit more of a focus.
Kirsten Cirella: That's very helpful. That's a great overview. To go back to one thing you touched on, an area that obviously has moved particularly quickly in the U.S. is the pre-merger notification process. It reached Canadian counsel as well, right? We started thinking about the expanded rules in our filing timelines and transaction planning. There has been a series of developments, even up to yesterday. We're recording on May 27, and on May 26 I think there was another development. Could you walk us through, at a high level, what has happened since the new rules were initially put into place in 2025?
Daniel Rosenthal: Yeah, absolutely. And obviously, I apologize to my brothers and sisters to the north for the fact that there's been a bit of a boomerang and a lot of changes.
Kirsten Cirella: There has been, for sure.
Daniel Rosenthal: So I know it's hard. It is a little hard to keep track of even when you're in the States. But you're absolutely right. So, stepping back and taking a wider lens view, for the past 50 years, since the HSR Act was implemented in the mid-1970s, the HSR pre-merger notification process largely stayed the same. There had been some incremental changes, but generally speaking, the HSR form and most of the requirements related to the HSR form had stayed fairly stable. The U.S. system, unlike some other systems around the world, is designed to give the agencies a relatively quick look at a transaction and based on that quick look, decide whether they want to dive in for a deeper, more substantial review of a transaction. That's always been the way that the system has been structured. In late 2023, under the Biden-era antitrust agency leadership, they announced some pretty significant changes to the HSR form itself. Those proposed changes involved a significant expansion in the types of documents that would be required, the types of data that parties would have to supply. And, unlike some other systems, the U.S. HSR process did not historically require an obligatory white paper or similar narrative submission; it was primarily a data- and document-oriented filing. Under the expanded HSR form, there were going to be narrative descriptions, not a white-paper-style narrative, but descriptions on things like overlaps. So that was announced in 2023 and under the U.S. system, whenever there's a major rulemaking change, there is a notice-and-comment period where the agencies have to justify that their rule is authorized.
Kirsten Cirella: Necessary, proportional, yeah.
Daniel Rosenthal: Yeah. Necessary and appropriate. We'll get into that because this becomes a real factor when the court starts to look at the rule. The question is whether the rule is justified under the law and, from a cost-benefit perspective, whether the costs justify the benefits derived from the new rule. The agencies went through that process. There were, I think, more than 700 comments from various parties, associations, concerned citizens and everything in between. In 2024, they announced the final HSR rules, which ultimately went into effect in February 2025. For about a year - and I know this is a long-winded description, but I think it's helpful to set the scene - the U.S. system operated under those new, expanded rules. However, I should step back. Right after the rules went into effect, several groups, including the U.S. Chamber of Commerce, the Business Roundtable and a local chamber in Texas, sued the FTC, arguing that it did not have authority to enact the new HSR rules. That lawsuit proceeded in the Eastern District of Texas, where Judge Kernodle ultimately sided with the business groups and vacated the new HSR rules. That decision has now been appealed to the Fifth Circuit. There are some terminology problems because we have new rules and old rules, so let's call the vacated version the expanded 2025 rules. Those rules are currently vacated, and for the time being we are back to the pre-2025 rules.
Kirsten Cirella: Wow. So how long were the new ones in play?
Daniel Rosenthal: For about a year. There was a bit of a learning curve, along with significant preparation and discussion among parties. I'm sure your Canadian listeners and Canadian parties were also having those discussions because any HSR filing made during that period had to be made under the expanded rules and include the additional disclosures.
Kirsten Cirella: Absolutely. We were having discussions about pre-filing timing and whether you needed to build additional time into the transaction timeline for the HSR filing, which we generally wouldn't have done in the past. From your experience living through it, how was that learning curve? Were you more nervous leading up to the changes than you ultimately needed to be, or was it as burdensome as expected?
Daniel Rosenthal: Yeah, I mean, it's a really good question because I think we were prepared for the most onerous and burdensome version of the requirements. And, as I mentioned, when the rules were proposed in late 2023, the proposed rules were even broader than the rules that were ultimately enacted. They included some significant additional requirements that never made it into the final rules. It's an interesting point because, at the time, the FTC was made up of five commissioners - three Democratic appointees and two Republican appointees. Ultimately, all five commissioners agreed to the final rules, including now-Chair Andrew Ferguson. Getting that level of consensus required changes to the proposal, and they removed some of the requirements that commenters were most concerned about. At the end of the day, there was unquestionably an increased burden on filers and counsel in preparing these filings. But, like anything else, over the course of a year you get used to it. It wasn't quite as onerous as some had feared, but it was still a significant expansion from the old HSR rules.
Kirsten Cirella: I can picture it being difficult for clients that have experience with the process and might make three filings a year. They're used to the rules, and they already don't love what they have to provide. Then you suddenly introduce all of these new requirements.
Daniel Rosenthal: That's absolutely right.
Kirsten Cirella: That must have led to some fun conversations. And then, just as they get used to the new process, you're telling them we're back to the old way, right?
Daniel Rosenthal: Absolutely. And not to be Pollyanna here or paint an overly positive sheen on it, but I do think there was one positive aspect of that period. Granted, we're in an appeal right now, so there is a world in which these new rules come back. But since we're currently back under the old rules, we can look at the experience in retrospect. It required some thoughtful analysis of filing procedures, how parties think about document preparation and what information needs to be disclosed.
Kirsten Cirella: That's a good point.
Daniel Rosenthal: It brought a focus to the filing process that may not always have been there, given how many competing requirements parties face.
Kirsten Cirella: Exactly. That's a good point. You mentioned briefly that the appeal is paused now. Could you elaborate on that and explain what you think it ultimately means for what the rules may look like in the future and for the administration's priorities?
Daniel Rosenthal: Yeah, absolutely. For listeners, I think the key point is that right now, and for the foreseeable future, it's essentially business as usual under the old pre-2025 HSR form. That's the form most repeat filers are familiar with. That filing regime remains in force for the foreseeable future. As for the Fifth Circuit appeal, each side was due to make filings in connection with the appeal. Right before the FTC's first filing was due on May 20, the FTC requested that the proceedings be paused until the end of the year, through December 31, 2026. The U.S. Chamber and the other parties opposing the appeal did not oppose that request. So, as it stands, the court is not expected to take action on the appeal for the remainder of the year. The idea is to allow the FTC's RFI process to run its course and potentially determine whether the lawsuit becomes moot if a new rule is pursued - essentially allowing the rulemaking process to play out. Both sides have agreed to put the appeal on pause while that process unfolds.
Kirsten Cirella: Based on your experience with the new and old rules, were there any aspects of the revised form that were more burdensome but that you nevertheless thought were useful or had broader benefits for screening mergers or advancing other priorities?
Daniel Rosenthal: Yeah. I think it's helpful to look at what the FTC and DOJ said about the old and new rules when they were proposing them in 2023 and 2024. One change under the new rules was an acknowledgement that NAICS and NAPCS codes - the industry- and product-level-specific codes issued by the U.S. Census Bureau - are not always the best way to assess overlaps between parties.
Kirsten Cirella: The industry codes? Yeah, yeah.
Daniel Rosenthal: Some are overly broad, some can be too narrow, and some may simply be difficult to apply.
Kirsten Cirella: Exactly. It can be hard to put a company into one box, right?
Daniel Rosenthal: Right. There is some subjectivity when you're trying to fit a square peg into a round hole. The agencies acknowledged that. One change under the expanded form was to do away with the NAPCS codes, which are product-level codes. I won't bore your Canadian listeners to sleep here, but in essence these are manufacturing product codes that are more granular than the NAICS codes required for filing. The FTC and DOJ indicated that they were not going to require the NAPCS codes under the expanded rules because they did not think the codes were especially useful, particularly because the new form included an overlap-description section where parties could disclose their actual overlaps.
Kirsten Cirella: Exactly - in their own words. A narrative description tailored to the transaction would probably be more useful, even if it requires a bit more information or work.
Daniel Rosenthal: I think that's right. If you look at the comments that have come in - and, as you mentioned, the RFI comments were posted only within the last few hours - it's helpful to see what people thought worked and did not work under the expanded rules. Some groups indicated that the narrative overlap descriptions were beneficial even for filers. They gave parties an opportunity not only to identify an overlap but also to explain a false positive - something that might look like an overlap on the face of a document but is not actually an overlap. Others would say that kind of explanation is more appropriately provided later in the review process.
Kirsten Cirella: When you're engaging with the FTC or DOJ, yeah.
Daniel Rosenthal: Exactly. So it should not necessarily be required for every transaction.
Kirsten Cirella: And the absence of a narrative could itself raise red flags. At the same time, you don't necessarily want to explain something where there is no overlap if the explanation itself could create the perception that there is an issue and invite a closer look.
Daniel Rosenthal: I totally agree. Some would say that nothing from the expanded rules should be salvaged or repackaged. Others would say that some of the expanded requirements turned out not to be as burdensome in practice as expected. My personal view is that it's important to make sure the agencies have the information they need, but there has to be a real cost-benefit analysis so that filers are not overly burdened. It's in no one's interest to extend the review of a transaction that should be able to clear quickly simply because useful information is not readily at hand. Some additional information can be appropriate as long as the requirement is reasonable.
Kirsten Cirella: One last question on the HSR rules: could you see an ultimate outcome where there are expanded requirements for certain types of transactions - essentially a two-tiered process - or would that be too difficult to administer in practice, such that the same rules should apply regardless of the transaction, industry or merger category?
Daniel Rosenthal: That's a great question. I think there are a couple different ways to think about it. Based on public statements by leadership at the Department of Justice and the FTC, as well as the questions asked in the recent RFI, it's quite clear that certain types of transactions are of particular interest to the current administration. I think there will be an effort to make sure regulators have the information needed to assess those transactions. Examples include single-family-home purchases by financial buyers and potential acquisitions involving foreign government entities. There may also be transaction structures that did not previously require an HSR filing, and I think the agencies will look for ways either to capture those transactions or at least to obtain the information they need to assess them. At the same time, the expanded HSR rules were challenged as overly broad and beyond the agencies' legal authority under the HSR Act and the Administrative Procedure Act. If the agencies try to expand the rules to capture transactions in particular industries, there will be a real question whether those changes are also challenged as overly broad. I don't want to get too far into the weeds, but back in 2011 there was a change in the HSR rules related to exclusive licenses in pharmaceutical transactions. The pharmaceutical industry challenged those rules on the basis that the industry was being singled out. Ultimately, the rules governing the treatment of exclusive licenses as assets remain in place. That may be a useful harbinger if the agencies try to tailor particular filing rules to specific industries.
Kirsten Cirella: That's very interesting context. Turning briefly to the RFI itself, as part of this reconsideration process the FTC and DOJ asked the public and other stakeholders what information should be required at the filing stage and when filing burdens should be reduced. The RFI included a lot of questions across a number of topics. Which issues stand out to you as most important for cross-border deal counsel?
Daniel Rosenthal: Yeah, absolutely. And just for your listeners who may not be perusing the FTC's website on a daily basis or maybe a little less familiar with this RFI.
Kirsten Cirella: What? I'm sure they all do.
Daniel Rosenthal: Well, I mean, if you read it to your children as a bedtime story like I do, perhaps it becomes second nature. But, seriously, this is a very interesting RFI given its timing and the ongoing appeal concerning the HSR rules. At a basic level, the RFI asked the public to comment on the effectiveness of the expanded 2025 rules - what worked well and what did not. But it also went beyond the expanded form and asked structural questions about how the HSR rules apply to specific types of transactions, including whether longstanding exemptions from the reporting requirements should be changed or revised. In that sense, the RFI may reflect both a recognition that parts of the expanded form could be improved and an interest in potentially expanding the types of transactions captured by pre-merger notification requirements. Chair Ferguson had indicated when the expanded rules were adopted that they could be improved and should be assessed over time. That's an interesting acknowledgement given that the FTC is still pursuing an appeal involving those same expanded rules. It will also be interesting to see how the agencies evaluate the calibration between the benefit of the additional information and the burden on filing parties. Not surprisingly, a number of business groups that sued the FTC believe that calibration was off, and their comments reflect that view. Other interested parties take a different position. What I found especially interesting was the RFI's focus on exemptions that have existed for a very long time. Certain exemptions have long excluded particular types of transactions from HSR filing requirements.
Kirsten Cirella: Transaction structures, yeah.
Daniel Rosenthal: Looking at the comments that have already come in, there's a lot of attention being paid to so-called acqui-hire transactions. These can involve, particularly in the tech sector, bringing on individuals or executives from another company through hiring packages that could arguably function like a de facto acquisition of the company itself, raising the question whether those arrangements should require HSR filings. There were also many comments concerning REITs - real estate investment trusts - and whether they should be brought within the HSR rules. Changes to these exemptions could significantly affect filing parties, including Canadian parties - which includes the majority of listeners to this podcast - so it's something to keep an eye on as the process plays out.
Kirsten Cirella: One thing that stood out to me was the RFI's focus on sovereign wealth funds, foreign-government affiliations and more CFIUS-type information in the merger review process. In Canada, we have merger review and then a separate Investment Canada Act process that addresses national-security concerns. Was it surprising to see those issues raised here? Do you think it signals a potential move toward greater overlap between merger review and national-security review in the U.S., or is that something that has been discussed in the past?
Daniel Rosenthal: It's a great observation and an interesting comparison with the Canadian system. In the U.S., CFIUS handles the national-security analysis of transactions that meet its requirements or are voluntarily filed. Historically, that process has run in parallel with, rather than being intertwined with, merger enforcement. The RFI's questions about CFIUS-related information, sovereign wealth funds and foreign government entities are therefore important to watch. I wasn't necessarily surprised to see those questions, but there can be understandable sensitivity around requiring those kinds of disclosures for transactions that appear innocuous from a competition standpoint. Given the current administration's focus on foreign involvement in the U.S. economy, however, it's not surprising that the agencies want to explore the issue. We should also be careful not to draw conclusions too early. This is a long process. Once the agencies digest the RFI responses, that's really only the end of the beginning. Any actual changes would still have to go through a formal rulemaking process, including a new notice-and-comment period. So there will be additional opportunities to assess the agencies' intent. But it's certainly something Canadian entities - including, potentially, Canadian pension funds - should keep an eye on.
Kirsten Cirella: Thank you. Before we wrap up, I want to talk briefly about state attorneys general and their role in merger review, because that's a major difference between the U.S. and Canadian systems. U.S. antitrust enforcement does not run only through the FTC and DOJ; state attorneys general can also be involved in antitrust proceedings, and they have been particularly visible recently. I have two questions. First, could you explain at a high level how state attorneys general fit into the U.S. antitrust enforcement system alongside the FTC and DOJ? And, as a practical matter, how do parties anticipate whether a transaction or investigation may attract state AG scrutiny? Does there need to be a particular connection to the state, and what kind of state-specific competitive impact matters?
Daniel Rosenthal: It's an interesting and evolving area. I would break it into two parts. First, on state merger-control enforcement, state attorneys general have independent legal authority under the Clayton Act and Sherman Act to bring merger challenges under U.S. antitrust law. Traditionally, in most circumstances, they have allowed the federal antitrust regulators to take the lead on enforcement decisions, although they have certainly participated in merger litigation and worked side by side with the DOJ. This is not completely unprecedented, but there have been some high-profile matters recently in which state attorneys general have diverged from the DOJ's ultimate position. Live Nation is one example.
Kirsten Cirella: Live Nation, right?
Daniel Rosenthal: Live Nation is a case that has gotten a lot of press.
Kirsten Cirella: It reached us over here.
Daniel Rosenthal: I know a lot of people who flew to Toronto to see Taylor Swift.
Kirsten Cirella: Yeah, exactly.
Daniel Rosenthal: So there is a lot of cross-border interest in this one. In the Live Nation/Ticketmaster matter, I think more than 30 state attorneys general, along with the Department of Justice, were involved in the investigation - not of the original transaction itself, but of a monopolization theory related to Live Nation/Ticketmaster. I believe that, in March, the DOJ ultimately decided to settle its litigation with the parties. Rather than go along with that settlement, a number of state AGs continued with the case, and a court in New York ultimately sided with those attorneys general. The remedy phase is still under consideration, but the important point is that the states chose not to follow the DOJ's settlement. There are other examples, including from the past year, where state AGs have gone their own way. This is not entirely new; there are examples from pre-Trump administrations of state AGs not necessarily following the Department of Justice's position. So I don't want to give the impression that this is completely unprecedented, but given some of the political waves affecting the U.S. political environment, it's something we should assume can remain in play going forward.
Kirsten Cirella: Yeah. It's a good point.
Daniel Rosenthal: There is also another development on the notification side. For some time, certain states have required disclosure of HSR filing materials for particular types of transactions, primarily in healthcare. More recently, several states have enacted what are often referred to as mini-HSR filing requirements. Where a state nexus is met - for example, because a party has its principal place of business in the state or meets certain revenue thresholds for sales into, from or to the state - the parties may be required to submit HSR materials to the state. Washington and Colorado are examples, with California and Indiana close behind. That raises the question you were getting at: how do states even know about some of these deals?
Kirsten Cirella: I didn't know about this new mini-HSR state regime either. That's very interesting.
Daniel Rosenthal: Right. So now there are certain transactions with a nexus to particular states where a state filing requirement can be triggered.
Kirsten Cirella: Yeah, it's a whole other filing requirement.
Daniel Rosenthal: Absolutely. There is not necessarily much additional work involved, but it's important for your listeners to know that these state notification requirements are non-suspensory, so they do not delay closing. They do, however, give state AGs another way of learning about deals that may be of interest in their state.
Kirsten Cirella: That's all very interesting and helpful. Unfortunately, we're out of time, but Daniel, thank you so much for joining us today and for helping put these U.S. developments into context for Canadian practitioners - and whoever else is listening. Thanks again.
Daniel Rosenthal: It's been a pleasure. Thank you so much.