The House Judiciary Committee’s antitrust panel Chairman David Cicilline is pushing for a temporary stop on most business mergers until the pandemic ends, in order to avoid a “buying spree” from bigger companies that could squelch competition in the long run.
The Rhode Island Democrat wants the next coronavirus economic package to ban all deals that aren’t directly connected to companies about to fail.
“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 at an antitrust event on Thursday, Politico reported.
“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 is expected to say.
His proposal would allow mergers to occur only if a company is already in bankruptcy or close to failing. Any other transactions would be put on pause until the coronavirus national emergency is lifted.
The proposal is unlikely to garner support from House Republicans, who have suggested they are skeptical of a moratorium on merger activity. Neither the Federal Trade Commission nor the Justice Department has indicated any issues with mergers so far.
The Justice Department, though, did ask Congress in March to give it more time on merger reviews during the pandemic. The federal government has never before issued a full ban on mergers, though it has imposed them in a few specific sectors in the past.
