The House’s antitrust chairman is pushing for a moratorium on mergers until the pandemic ends, warning that a “buying spree” by well-heeled companies and investors could wipe out competition from smaller players amid the cratering economy.
In an interview with Politico, Rep. David Cicilline (Democrat – Rhode Island) said he is pushing for the next coronavirus package to ban deals that aren’t directly related to companies about to fail.
His proposal would allow transactions only if a company is already in a bankruptcy or is otherwise about to fail. Any other deals would be on hold at least until the national pandemic declaration is lifted.
Cicilline, who chairs House Judiciary’s antitrust subcommittee, is expected to unveil his proposal at an event Thursday, April 23, hosted by the Open Markets Institute, an anti-monopoly group that has been advocating for such a merger moratorium.
“As millions of businesses struggle to stay afloat, private equity firms and dominant corporations are positioned to swoop in for a buying spree,” Cicilline is expected to say, according to prepared remarks viewed by Politico. “This is not complicated. Our country can leave room for merger activity that is necessary to ensuring that distressed firms have a fresh start through the bankruptcy process or through necessary divestitures while also ensuring that we do not undergo another period of rampant consolidation.”
The moratorium is highly unlikely to win support from Republicans on the panel, who have indicated that they are skeptical of the need for a pause in merger activity, particularly as neither the Justice Department (DOJ) nor the Federal Trade Commission (FTC) has indicated any problems so far.
The DOJ asked Congress last month to give it more time on merger reviews during the pandemic. But FTC officials, who share jurisdiction with the DOJ on mergers, have said they are seeing fewer deals reported to the agency because of the economic crisis.
