COVID-19 Merger Moratorium Could Hamper Vital Innovation

18 May 2020
Dr. Stephanie Demperio, Dr. Gabriella Monahova, and Dr. Emily Walden

The proposed Pandemic Anti-Monopoly Act recently introduced by Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez would temporarily prohibit a significant number of mergers and acquisitions during the COVID-19 pandemic. In a Law360 article, NERA Associate Director Dr. Stephanie Demperio, Senior Consultant Dr. Gabriella Monahova, Senior Consultant Dr. Emily Walden, and Cooley LLP Partner Tanisha James express concerns for such a broad ban on M&A activity because:

  • It could increase the level of uncertainty in the market and, as a result, risks cutting critical sources of funding for the small businesses the bill’s sponsors are seeking to support, and
  • Agencies and existing merger review laws are sufficiently robust and flexible to handle required M&A analysis, even during a pandemic. 

While the proposed act may be well-intentioned, such a broad ban on M&A activity could stifle firms' ability to grow or merely stay afloat in these uncertain times.