House antitrust chair wants ban on mergers during coronavirus pandemic - Business Insider

The chairman of the House Antitrust Subcommittee, Rep. David Cicilline, plans to introduce a provision for the next coronavirus relief package to ban mergers until the pandemic is over, heCicilline, a Democrat from Rhode Island, is worried that the pandemic could start a "buying spree" in which financially-stable companies could take advantage of the economic downturn and lead to a decline in competition.

The ban on mergers would exclude companies already in bankruptcy or otherwise set to fail imminently, the report said, and would end as soon as the pandemic declaration is lifted. It is unclear if the provision would have enough support from Republicans, including the president and the Republican-led Senate, to become law.

The Federal Trade Commission and the Justice Department's antitrust division, which hold regulatory power over mergers, have not publicly called for such a ban.that they "will aim to respond expeditiously to all COVID-19-related requests" with "guidance about how to ensure their efforts comply with the federal antitrust laws," as some companies enter into unique partnerships to address the pandemic.

The agencies did not address mergers specifically, but said that "many types of collaborative activities designed to improve the health and safety response to the pandemic would be consistent with the antitrust laws," such as sharing of technical knowledge or research and development.

Ban stock buybacks!

The government should be a lender of last resort, a ban on mergers in effect forces companies to take bailout money, and increases the cost to the taxpayer.

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