Top antitrust Democrat proposes merger ban amid pandemic
Rep. David Cicilline (D-R.I.), chairman of the House Judiciary antitrust subcommittee, on Thursday proposed a ban on most merger activity amid the coronavirus pandemic.
“As millions of businesses struggle to stay afloat, private equity firms and dominant corporations are positioned to swoop in for a buying spree,” the Rhode Island lawmaker said during a tele-conferenced speech at an event held by the Open Markets Institute. “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.”
Cicilline said he and several other lawmakers are pushing for a moratorium on merger activity as part of the upcoming stimulus package.
“Megamergers and corporate takeovers that were permitted during the last economic crisis led to the firing of millions of workers, the slowing of investment and innovation, and huge increases in executive compensation,” he said.
The Department of Justice has asked Congress for more time to review mergers during the pandemic.
Federal Trade Commission officials, who also have jurisdiction over mergers, have reported fewer deals being reported to the agency.
A full moratorium on mergers would be unprecedented in the U.S., although the government has paused sector-specific mergers before.