A new law that took effect in July makes Washington the first state in the nation to require companies to notify the state Attorney General about certain mergers and acquisitions that already trigger federal antitrust filings.
The goal of the legislation is to give state regulators an earlier look at deals that could affect competition. Some states, including Washington, already have similar requirements for specific industries such as healthcare. But the new law applies to any sector — including tech.
Vishal Mehta, an attorney at K&L Gates who specializes in antitrust law, said the legislation continues a trend of states taking a more active role in merger oversight.
“The main purpose is so state enforcers can have a seat at the table earlier in the process, particularly with respect to transactions that have some sort of local nexus,” Mehta said.
The law could impact Seattle startups and acquiring companies. While attorneys don’t expect it to discourage acquisitions, it could slightly slow timelines and give state regulators more leverage to review transactions.
For most acquirers, it’s an extra compliance step that could extend timelines rather than a deterrent, said Jessica Pearlman, a corporate attorney with K&L Gates. “The business case for a deal is still going to exist,” she said.
Still, Mehta said companies should evaluate how their transactions could impact local competition, particularly if both parties have a significant presence in Washington.
Under the law, companies that file federal Hart-Scott-Rodino (HSR) pre-merger notices must also send an electronic copy to the Washington Attorney General’s Office if they meet any of three criteria:
- Their principal place of business is in the state.
- They derive at least 20% of the federal HSR threshold (about $25 million) in Washington sales for the goods or services involved.
- They are a healthcare provider doing business in Washington.
The filing must be made at the same time as the federal HSR submission. There’s no filing fee, but penalties for non-compliance can reach $10,000 per day.
The Washington law mirrors one recently enacted in Colorado, and is based on the Uniform Antitrust Premerger Notification Act, crafted by the Uniform Law Commission. That model legislation explicitly encourages information-sharing among states that adopt similar rules.
The requirement itself is straightforward, but lawyers say questions remain about what happens next as more states adopt similar legislation — particularly around data-sharing and confidentiality.
Mehta said it remains to be seen whether state enforcers will focus on particular sectors such as tech or private equity. It may vary from state to state, depending on the political and economic priorities of particular state governments, he said.
Washington’s push for earlier oversight follows several high-profile battles involving state antitrust authority. In 2019, Washington joined other states in suing to block the Sprint–T-Mobile merger, which ultimately went through. More recently, the state successfully challenged the proposed Kroger–Albertsons merger, which was abandoned after a Washington court ruled against it.
The new rule adds to growing list of compliance and reporting requirements for businesses in Washington, including a sales tax expansion on digital services and increases to the business & occupation (B&O) tax, both passed by lawmakers this year.
