WASHINGTON — Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y., are teaming up on a proposal to halt mergers and acquisitions for large companies during the coronavirus pandemic, elevating a progressive cause as Democrats and apparent nominee Joe Biden craft the party’s platform ahead of the 2020 election.
The “Pandemic Anti-Monopoly Act” 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.
Affected firms would include businesses with over $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.
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The new push by the two progressive lawmakers reflects an appetite on the populist left to use regulatory powers to prevent the coronavirus downturn from accelerating monopolization in the United States. Advocates have been raising the alarm since before the crisis hit about a steady consolidation in airlines, hospitals and telecommunications — among other industries — arguing that it’s harming consumers.
Warren and Ocasio-Cortez are planning to announce the proposal Tuesday and introduce the bill after Congress returns to session. It will face long odds while business-friendly Republicans control the Senate and the White House, but it raises the stakes for the 2020 election and signals the sort of pressures Biden would face from progressives if he wins the presidency.
The new plan comes after Rep. David Cicilline, D-R.I., the chairman of the House Judiciary antitrust subcommittee, called last week for a ban on most mergers during the COVID-19 pandemic.
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“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 would free anti-trust agencies of waiting periods and deadlines for the duration of the moratorium. It would require the FTC to set up new rules to establish a legal presumption against mergers and acquisitions if they could hinder the government’s ability to combat a national emergency.
Warren mounted an unsuccessful bid for the Democratic presidential nomination, but her ideas-focused campaign has shaped the intraparty debate and Biden’s platform. Ocasio-Cortez, a first-term congresswoman who has gained a large following on the left, has been pushing her party to mount a more aggressive legislative response to the coronavirus.
“This legislation is desperately needed,” Ocasio-Cortez said. “If we don’t stop predatory M&As now, the actions of big corporations will have decadeslong economic consequences — for all of us. With less competition, the whole country will see job loss and higher costs for consumers.”