On Wednesday, Democrats escalated efforts to ban major corporate mergers during the coronavirus pandemic, penning a letter to the Treasury Department calling for a ban on any mergers by companies that received pandemic relief.
For several weeks, lawmakers like Sen. Elizabeth Warren (D-MA) and Rep. David Cicilline (D-RI), chairman of the House Judiciary Committee’s subcommittee on antitrust, have pushed for a general moratorium on mergers until the pandemic ends. In April, Cicilline proposed that corporate mergers could only take place if a company was about to fail or already in bankruptcy.
Cicilline is currently leading a sweeping investigation into the tech sector over potential anti-competitive behavior.
Later that month, Warren, along with Rep. Alexandria Ocasio-Cortez (D-NY), announced plans to introduce the “Pandemic Anti-Monopoly Act,” which would impose a large merger moratorium until the Federal Trade Commission “determines that small businesses, workers, and consumers are no longer under severe financial distress,” according to NBC News.
House Democrats’ latest stimulus package, introduced on Tuesday, did not include any language targeting large corporate mergers. In their Wednesday letter, Democrats, including Warren, Cicilline, and Sen. Amy Klobuchar (D-MN) asked for the Federal Reserve and the Treasury Department to halt all mergers between large companies that have received “bailout” funding from Congress’ coronavirus relief packages.
“As small businesses struggle to stay afloat, they have become potential targets of large corporations seeking to exploit the crisis to increase their market power,” the lawmakers wrote in the letter. “Small businesses help form the backbone of our economy, yet giant corporations are benefiting most from this bailout.”
Still, the Democrats’ antitrust plans haven’t caught fire across the aisle. In a letter to the Justice Department’s assistant attorney general for antitrust, Makan Delrahim, and the FTC’s competition director, Republicans wrote that the Democrats’ requests were harmful to the US’s economy.
“Unfortunately, these ideas are part and parcel of the latent socialism embraced by many modern Democrats, which represents an existential threat to America’s economic superiority,” the Republicans wrote in their Wednesday letter.
On CNBC Wednesday, Delrahim responded to the calls for a moratorium, saying, “We haven’t seen the legislative language, so we can’t have any official position on it.” He continued, “However, I think it would be misguided to just block all attempts for transactions.”