that “giant corporations and private equity vultures are
just waiting for a chance to gobble up struggling small
business and increase their power through predatory
mergers[.]” Likewise, Rep. Ocasio-Cortez declared
that “[t]his legislation is desperately needed. Antitrust
agencies have already admitted their capacity to review
mergers is reduced by the crisis. Meanwhile, reports
say that Rite Aid, private equity, and other big business
are actively looking to scoop up smaller business and
consolidate industry for their gains…If we don’t stop
predatory M&As now, the actions of big corporations
will have decades-long economic consequences—for
all of us.”
1. While no bill text is available at this time, Sen.
Warren and Rep. Ocasio-Cortez propose that the
Act would do the following:
a. Impose a moratorium on “risky mergers
and acquisitions until the Federal Trade
Commission (FTC) determines that small
businesses, workers, and consumers are no
longer under severe financial distress.” The
moratorium includes mergers and acquisitions
that involve:
b. companies with over $100 million in revenue or
financial institutions with over $100 million in
market capitalization;
c. private equity companies, hedge funds, or
companies that are majority-owned by a
private equity company or hedge fund;
d. companies with an exclusive patent that
impacts the crisis, like personal protective
equipment; and
e. transactions that must otherwise be reported
to the Federal Trade Commission under current
law.
2. Pause all waiting periods and deadlines imposed
on antitrust agencies during the moratorium.
3. Direct the FTC to engage in rulemaking to
establish a legal presumption against mergers and
acquisitions that pose a risk to the government’s
ability to respond to a national emergency.
The Chairman of the House Judiciary antitrust
subcommittee, David Cicilline (D-R.I.), supports the
proposed Act and is trying to get the ban included in
the next stimulus bill.
On the other hand, FTC Commissioner Noah Joshua
Phillips has suggested that the Act may not be needed.
Commissioner Phillips has disputed the contentions
that antitrust enforcers have been overwhelmed by
merger activity during the pandemic, and has argued
that mergers have “an important role to play during a
period of economic adjustment.”
While the legislation is unlikely to pass, the proposed
Act is evidence of a growing push for increased
antitrust enforcement and regulation in light of the
COVID-19 pandemic. The already heightened spotlight
that has shined on antitrust regulation and enforcement
over the past two years is shining even brighter as a
result of the COVID-19 pandemic.
President Trump Invokes the Defense Production Act
to Address Food Shortages
On April 28, 2020 President Trump invoked the Defense
Production Act (DPA) to classify processors of beef,
pork, and poultry as critical infrastructure that must
remain open. According to the Washington Post, at
least 20 meatpacking plants closed in recent weeks
because of COVID-19 outbreaks. Industry analysts
estimate that pork and beef processing has fallen
approximately 25 percent as a result. Recently, plaintiffs
in a current class action against pork processors for
allegedly conspiring to raise pork prices used President
Trump’s declaration as a way of proving the plausibility
of their claims.
In his executive order, President Trump noted
the importance of meat processors’ continued
operations “to ensure a continued supply of protein
for Americans.” The order concluded that the recent
closures of meat processing facilities “undermine[s]
critical infrastructure during the national emergency.”
Thus, pursuant to his authority under the DPA, the
President directed the Secretary of Agriculture to take
all appropriate action to ensure that meat processors
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