Washington, DC – Sen. Elizabeth Warren (D-MA) and Rep. Alexandria Ocasio-Cortez (NY-14) proposed legislation today to halt harmful mergers, in order to protect the American public from further consolidation and concentration. Open Markets applauds the moratorium on mergers and acquisitions by large firms as well as post-crisis rules to prevent dangerous takeovers once the economy begins to improve.

Specifically, the legislators’ plan calls for 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.” The ban would apply to businesses with more than $100 million in revenue or financial firms with market capitalization of more than $100 million; private equity companies and hedge funds (or entities that are majority-owned by them); businesses that have exclusive patents on products, such as personal protective equipment, that pertain to the crisis; and other transactions are already required by law to be reported to the FTC.

This proposal comes just days after Rep. David Cicilline (RI-1), chairman of the House Antitrust Subcommittee, called for a merger moratorium at an event with the Open Markets Institute.

In March, Open Markets urged Congress, the Trump administration, and federal and state law enforcement agencies to “use their various powers to impose an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue, and by any financial institution or equity fund with more than $100 million in capitalization.” Open Markets wrote then that a moratorium on mergers was needed to prevent a wholesale concentration of additional power by corporations that already dominate or largely control their markets, especially in ways that may significantly worsen the crisis that now threatens America’s health, social, and economic systems.

Without a merger ban, Americans will face even greater concentration and increased economic and political inequality after the pandemic. While most independent businesses are facing hardship, corporations such as Apple have plenty of available cash and are ready to use it immediately for takeovers.

“The proposal includes many of the right principles needed, including a merger ban,” said Sandeep Vaheesan, legal director of Open Markets Institute. “It’s important that we not only pause mergers for the duration of the crisis, but also extend the ban well into the recovery phase. Independent businesses are struggling right now, while private equity and many large corporations are flush with cash and ready to go on acquisition sprees. If the government acts quickly, we can save the majority of independent firms and stem further concentration in the American economy. We just need to give independent firms the means to weather this unprecedented crisis and survive as autonomous businesses.”