Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) are set to introduce legislation that would put a moratorium on mergers involving large companies during the coronavirus pandemic.
The Pandemic Anti-Monopoly Act would freeze mergers that include companies that have more than $100 million in revenue, are run by hedge funds or private equity firms or that have exclusive patents impacted by the crisis, like key medical equipment.
Additionally, all mergers that must be reported to the Federal Trade Commission (FTC) under current law, which in 2020 is any valued over $94 million, would be frozen as well.
The moratorium would remain in place until the FTC determines small businesses, workers and consumers are no longer under severe financial distress from the pandemic.
The legislation would also direct the FTC to establish legal presumption against mergers that could harm the government’s response to a national emergency, like the coronavirus.
“As we fight to save livelihoods and lives during the coronavirus pandemic, giant corporations and private equity vultures are just waiting for a chance to gobble up struggling small businesses and increase their power through predatory mergers,” Warren said in a statement.
Ocasio-Cortez said the legislation “is desperately needed.”
“If we don’t stop predatory M&As [mergers and acquisitions] now, the actions of big corporations will have decades-long economic consequences — for all of us. With less competition, the whole country will see job loss and higher costs for consumers,” she said.
Both progressive lawmakers have been big supporters of strengthening antitrust enforcement, particularly to tackle the consolidation of power by big technology companies.
A full moratorium on mergers would be unprecedented in the U.S., although the government has paused sector-specific mergers before.
The legislation comes shortly after Rep. David Cicilline (D-R.I.), chairman of the House Judiciary antitrust subcommittee, proposed including a merger moratorium in upcoming stimulus legislation.