FTC Raises Maximum Civil Penalty to $40,000; HSR Act and Other Continuing Violations May Incur Civil Penalties of Over $14 million Per Year

June 30, 2016

For anyone who viewed FTC civil penalties as a cost of doing business, the cost just went up dramatically. The U.S. Federal Trade Commission (“FTC”) has increased the maximum civil penalty for certain violations to $40,000, 250% higher than the current $16,000 maximum civil penalty. The full notice can be seen here. Because of the way civil penalties are computed under various statutes enforced by the FTC, the impact of this change will be most acute in enforcement against Hart-Scott-Rodino Act (“HSR Act”) violations and other continuing violations. Under the HSR Act, where the civil penalty is set by statute on a per day basis, the maximum total civil penalty could be $40,000 multiplied by the number of days the person is deemed to be in violation. Similarly for continuing violations, the FTC considers each day to be a separate violation of the statute or Order. In other words, maximum civil penalties for HSR Act violations and other continuing violations could be as much as $1.2 million per month or $14.4 million per year.

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