Pandemic Anti-Monopoly Act

II 116TH CONGRESS 2D SESSION S. 4013 To prohibit certain transactions during the coronavirus disease 2019 (COVID–19) pandemic. IN THE SENATE OF THE UNITED STATES JUNE 18, 2020 Ms. WARREN (for herself and Mr. SANDERS) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To prohibit certain transactions during the coronavirus disease 2019 (COVID–19) pandemic. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Pandemic Anti-Monop- 4 oly Act’’. 5 SEC. 2. MORATORIUM ON CERTAIN MERGERS AND ACQUISI- 6 TIONS. 7 (a) IN GENERAL.—Except as provided in subsection 8 (b), during the period beginning on the date of enactment 9 of this Act and ending on the date on which the Federal 10 VerDate Sep 11 2014 22:18 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4013.IS S4013 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 4013 IS Trade Commission votes unanimously under subsection 1 (c), the following transactions are prohibited: 2 (1) Acquisitions by firms with over 3 $100,000,000 in revenue. 4 (2) Acquisitions by financial institutions or eq- 5 uity funds with over $100,000,000 in capitalization. 6 (3) Acquisitions by firms that are registered in- 7 vestment advisers under section 203 of the Invest- 8 ment Advisers Act of 1940 (15 U.S.C. 80b–3) or by 9 firms that are majority-owned by a firm that is a 10 registered investment adviser under that section. 11 (4) Acquisitions involving firms with exclusive 12 patent pertaining to coronavirus disease 2019 13 (COVID–19) pandemic-related production, manufac- 14 turing, distribution, or infrastructure, medical sup- 15 plies, equipment, facilities, or services, and drug re- 16 search, development, production, supply, reserves, or 17 distribution. 18 (5) Any other acquisition required to be re- 19 ported under section 7A of the Clayton Act (15 20 U.S.C. 18a). 21 (6) Does not include an acquisition that is a 22 transaction described in paragraph (1), (2), (3), (4), 23 (5), (9), or (10) of section 7A(c) of the Clayton Act 24 (15 U.S.C. 18a(c)). 25 VerDate Sep 11 2014 22:18 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4013.IS S4013 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 4013 IS (b) WAIVER.— 1 (1) IN GENERAL.—Firms participating in any 2 transaction described in subsection (a) may petition 3 the Federal Trade Commission for a waiver by pre- 4 senting clear and convincing evidence that the trans- 5 action will advance critical national security, eco- 6 nomic, or public health interests during the emer- 7 gency. 8 (2) FAILING FIRM.—The acquisition of a failing 9 firm shall be considered to advance critical economic 10 interests and shall be deemed to meet the criteria 11 for a waiver under paragraph (1). A firm shall be 12 deemed failing if the Commission concludes that— 13 (A) the firm would be unable to meet the 14 financial obligations of the firm in the near fu- 15 ture, having established that the resources of 16 the firm are so depleted and the prospect of re- 17 habilitation so remote that the firm faces the 18 grave probability of a business failure; 19 (B) the probability of the firm successfully 20 reorganizing under chapter 11 of title 11, 21 United States Code, is dim or nonexistent; and 22 (C) the firm has demonstrated that the 23 firm made good faith efforts to elicit reasonable 24 alternative offers that would keep assets of the 25 VerDate Sep 11 2014 22:18 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4013.IS S4013 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 4013 IS firm in the market and pose a less severe dan- 1 ger to competition than does the proposed ac- 2 quisition. 3 (3) VOTE.—The Federal Trade Commission, by 4 unanimous Commission vote and with the written 5 concurrence of the Attorney General, the Secretary 6 of Defense, the Secretary of Homeland Security, the 7 Secretary of Labor, the Secretary of Health and 8 Human Services, and the Administrator of the Small 9 Business Administration may grant a petition under 10 paragraph (1) if the Commission determines that 11 the transaction will advance critical national secu- 12 rity, economic, or public health interests during the 13 emergency. 14 (4) EXPLANATION.—Upon granting a petition 15 under this subsection, the Federal Trade Commis- 16 sion shall publish in the Federal Register and on the 17 website of the Commission the rationale for granting 18 the petition. 19 (c) TERMINATION OF MORATORIUM.— 20 (1) IN GENERAL.—The prohibition in sub- 21 section (a) shall not apply only if the Federal Trade 22 Commission unanimously determines, with the writ- 23 ten consent of the Attorney General, the Secretary 24 of Labor, and the Administrator of the Small Busi- 25 VerDate Sep 11 2014 22:18 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4013.IS S4013 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 4013 IS ness Administration, that the prohibition should no 1 longer apply. 2 (2) INITIAL DETERMINATION.—The Federal 3 Trade Commission may only hold a vote under para- 4 graph (1) after— 5 (A) the national emergency under the Na- 6 tional Emergencies Act (50 U.S.C. 1601 et 7 seq.) with respect to the coronavirus disease 8 2019 (COVID–19) has terminated; 9 (B) each State of the United States, the 10 District of Columbia, any territory of the 11 United States, Puerto Rico, Guam, American 12 Samoa, the Virgin Islands, and the Northern 13 Mariana Islands have reopened their economies; 14 (C) the 100-day period ending on the later 15 of the date on which subparagraph (A) or (B) 16 has been satisfied expires; and 17 (D) the Commission determines that small 18 businesses and workers are no longer under se- 19 vere financial distress. 20 (d) TOLLING.—During the period beginning on the 21 date of enactment of this Act and ending on the date on 22 which the Federal Trade Commission votes under sub- 23 section (c)(1) to remove the prohibition under subsection 24 (a), any waiting period or deadline required under section 25 VerDate Sep 11 2014 22:18 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4013.IS S4013 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 4013 IS 7A of the Clayton Act (15 U.S.C. 18a) shall be automati- 1 cally tolled. 2 (e) PENALTIES.—Any firm attempting a prohibited 3 transaction under this section shall be subject to an order 4 blocking or reversing the transaction and a penalty of not 5 less than 10 percent of the revenue of the firm for fiscal 6 year 2019. 7 (f) RESILIENCY RULEMAKING.— 8 (1) IN GENERAL.—There shall be a legal pre- 9 sumption against a transaction that may pose a risk 10 to the Government’s ability to respond to a national 11 emergency, including— 12 (A) a transaction that may reduce, restrict, 13 curtail, or otherwise undermine the ability of 14 the Government to invent, develop, improve, 15 produce, procure, stockpile, or otherwise make 16 available goods and services that are life-saving 17 or otherwise essential to the Government’s abil- 18 ity to address the coronavirus disease 2019 19 (COVID–19) pandemic or other potential public 20 health, safety, or other emergencies; 21 (B) a transaction that may reduce, limit, 22 curtail, or otherwise create a disincentive for re- 23 search, development, or production of goods or 24 services described in subparagraph (A); and 25 VerDate Sep 11 2014 22:18 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4013.IS S4013 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 4013 IS (C) a transaction by a firm under contract 1 within the last 5 years with the Federal Gov- 2 ernment regarding any goods or services de- 3 scribed in subparagraph (A). 4 (2) BURDEN.—If a firm seeks to complete a 5 transaction described in paragraph (1), that firm 6 shall have the burden of showing by clear and con- 7 vincing evidence that the transaction does not pose 8 a risk to the Government’s ability to respond to a 9 national emergency. 10 (3) RULEMAKING.—Not later than 1 year after 11 the date of enactment of this Act, the Federal Trade 12 Commission shall promulgate regulations to further 13 define— 14 (A) transactions that fall under paragraph 15 (1)(A); 16 (B) transactions that fall under paragraph 17 (1)(B); 18 (C) companies that fall under paragraph 19 (1)(C); and 20 (D) specific goods and services that are 21 life-saving or otherwise essential to the Govern- 22 ment’s ability to address the coronavirus dis- 23 ease 2019 (COVID–19) pandemic or other po- 24 VerDate Sep 11 2014 22:18 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4013.IS S4013 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 4013 IS tential public health, safety, or other emer- 1 gencies. 2 Æ VerDate Sep 11 2014 22:18 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S4013.IS S4013 pbinns on DSKJLVW7X2PROD with BILLS