The coronavirus pandemic has paralyzed the global economy, but large tech companies remain relatively well-positioned to reach into their deep pockets to make big moves.
In an effort to call attention to the plight of smaller businesses — and the disproportionate power and resources of larger ones — Sen. Elizabeth Warren (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY) will propose new legislation to freeze large mergers and acquisitions during the coronavirus crisis. Their new proposal calls out "big tech" by name.
The Pandemic Anti-Monopoly Act, set to be introduced after Congress is back in session, would enact a moratorium on mergers and acquisitions from companies with more than $100 million in revenue, financial institutions with a market capitalization of more than $100 million, private equity companies, hedge funds and companies that private equity companies or hedge funds have a majority-ownership stake in. The bill would also hit pause on mergers and acquisitions by companies with "an exclusive patent that impacts the crisis."
Last week, House Antitrust Subcommittee Chairman David Cicilline (D-RI) called for similar measures, warning against "mega-mergers" like those that took place in the wake of the 2008 financial crisis.
"The LEAST we should do is halt big mergers during COVID to slow the consolidation of sectors," Ocasio-Cortez said in a tweet.
Now is the time to stand up for mom + pops & protect them from getting wiped out by Wall Street.
That means checking mega corps from gobbling up small biz during a global crisis. @ewarren & I have the bill.
A few bankers may cry about it, but something tells me they’ll live 🤷🏽♀️ https://t.co/SQ7xeMEwYW
The proposal, which would also pause any waiting periods and deadlines for antitrust oversight agencies, would freeze these actions "until the Federal Trade Commission (FTC) determines that small businesses, workers, and consumers are no longer under severe financial distress."
According to a summary, the proposal would seek to "[ensure] that small businesses have viable alternatives other than accepting acquisition offers that may lead to job losses, price increases, and further entrenchment of giant corporate power."
As two of the most prominent voices in progressive politics, Warren and Ocasio-Cortez are leveraging their combined political power to shape the conversation around the virus as the U.S. plunges into a deeply uncertain election year.
While unlikely to attract bipartisan support, reminding voters that tech companies with vast accumulated cash could swoop in and clean up during the crisis is a message that meshes with the Democratic party's recent critiques of the tech industry. Those concerns are mostly on the back burner now, but a major reshuffling of capital and power could boost tech's incumbents — and devastate some of its already struggling upstarts.