House Antitrust Subcommittee Chairman David Cicilline called for a ban on mergers Thursday (April 23) until the COVID-19 pandemic ends, CNBC reported.
“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 Democrat told the Open Markets Institute, a Washington, D.C. advocacy group whose mission is to end corporate monopolies. “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’s subcommittee is investigating tech industry consolidation including Amazon, Apple, Facebook and Google parent company Alphabet.
He said such a provision should be included in the next congressional coronavirus relief package.
Under his proposal, only mergers of businesses that have declared bankruptcy or are about to fail should be allowed during the national emergency, the report said.
His subcommittee had planned to issue a report on the panel’s findings earlier this month. But the coronavirus pandemic has pushed the publication date back.
In a previous interview, Cicilline told CNBC the report would lead to new regulations to reform the digital marketplace and empower antitrust law enforcers.
While mergers tend to take a back seat during recessions, the news outlet reported the nature of this crisis centering around public health makes it hard to predict.
Federal Trade Commission (FTC) Commissioner Noah Phillips told Politico last week that the agency had seen less merger activity during the crisis, but it is keeping an eye out for such instances.
While Cicilline acknowledged the merger slowdown, he said more are coming.
Instead of reviewing mergers, Cicilline said the FTC should focus on non-compete clauses that make it difficult for laid-off workers to find new jobs during the pandemic.
“The last thing our country needs right now is expending valuable resources in response to a wave of megamergers during a time of crisis,” he said.
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