Two lawmakers are working on a proposal that would prevent large companies from partaking in mergers and acquisitions during the coronavirus outbreak, NBC News reports.
Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y., have joined forces to propose the Pandemic Anti-Monopoly Act.
The proposed bill would impose a moratorium on mergers and acquisitions involving large companies until the Federal Trade Commission “determines that small businesses, workers, and consumers are no longer under severe financial distress,” according to a summary of the proposal reviewed by NBC News.
Firms impacted by the law would include businesses with more than $100 million in revenue or financial firms with market capitalization of over $100 million; private equity companies and hedge funds (or entities that are majority-owned by them); businesses that have an exclusive patent on products like personal protective equipment which pertain to the crisis; and other transactions are already required by law to be reported to the FTC.
The goal is to prevent monopolization from rising out of the economic downturn. They cited reports from technology firms, private equity companies and Rite Aid that indicate they are considering acquisitions.
“Every day, we’re hearing stories of desperate small businesses struggling to survive during this crisis. Large companies and private equity vultures are circling for a chance to gobble up these small businesses and increase their already immense economic power,” Warren told NBC News in a statement. “We have to make sure we protect workers, small businesses, and entrepreneurs so they are not squeezed ever further by harmful mergers now or in any future emergency.”
The proposal is scheduled to be announced today and introduced once Congress returns to session.
Last week, chairman of the House Judiciary antitrust subcommittee Rep. David Cicilline, D-R.I. called for a ban on most mergers during the pandemic.
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