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15 U.S. Code § 18b - Mergers involving foreign government subsidies

(a) Definition

In this section, the term “foreign entity of concern” has the meaning given the term in section 18741 of title 42.

(b) Accounting for foreign government subsidies

A person required to file a notification under section 18a of this title that received a subsidy from a foreign entity of concern shall include in such notification content regarding such subsidy.

(c) Authority of antitrust regulators

The Federal Trade Commission, with the concurrence of the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice, and in consultation with the Chairperson of the Committee on Foreign Investment in the United States, the Secretary of Commerce, the Chair of the United States International Trade Commission, the United States Trade Representative, and the heads of other appropriate agencies, and by rule in accordance with section 553 of title 5, shall require that the notification required under subsection (b) be in such form and contain such documentary material and information relevant to a proposed acquisition as is necessary and appropriate to enable the Federal Trade Commission and the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice to determine whether such acquisition may, if consummated, violate the antitrust laws.

(d) Effective date

Subsection (b) shall take effect on the date on which the rule described in subsection (c) takes effect.

Statutory Notes and Related Subsidiaries
Findings and Purpose

Pub. L. 117–328, div. GG, title II, § 201, Dec. 29, 2022, 136 Stat. 5969, provided that:

“(a) Findings.—Congress finds the following:
Foreign subsidies, which can take the form of direct subsidies, grants, loans (including below-market loans), loan guarantees, tax concessions, preferential government procurement policies, or government ownership or control, can distort the competitive process by enabling the subsidized firm to submit a bid higher than other firms in the market, or otherwise change the incentives of the firm in ways that undermine competition following an acquisition.
Foreign subsidies are particularly problematic when granted by countries or entities that constitute a strategic or economic threat to United States interests.
The Made in China 2025 plan, states that the Chinese Communist Party will ‘support enterprises to carry out mergers and acquisitions (M&A), equity investment, and venture capital overseas’.
The 2020 report to Congress from the bipartisan U.S.-China Economic and Security Review Commission concluded that the Chinese Government subsidizes companies with a goal of their expanding into the United States and other countries, finding that ‘[t]his process assists Chinese national champions in surpassing and supplanting global market leaders’. The report warns that the risk is particularly acute when it comes to emerging technologies, where China seeks to ‘surpass and displace the United States altogether [and that] [f]ailure to appreciate the gravity of this challenge and defend U.S. competitiveness would be dire … [and] risks setting back U.S. economic and technological progress for decades’.
In remarks before the Hudson Institute on December 8, 2020, FTC Commissioner Noah Phillips stated, ‘[O]ne area where antitrust needs to reckon with the strategic interests of other nations is when we scrutinize mergers or conduct involving state-owned entities … companies that are controlled, to varying degrees, by the state … [and] often are a government tool for implementing industrial policies or to protect national security’.
“(b) Purpose.—
The purpose of this section [probably means “this title”, enacting this section and this note] is to require parties providing pre-merger notifications to include in the notification required under section 7A of the Clayton Act (15 U.S.C. 18a) information concerning subsidies they receive from countries or entities that are strategic or economic threats to the United States.