The Big Story: Lawmakers propose freezing mergers during pandemic. Several congressional Democrats have proposed a temporary halt on certain “big” mergers and acquisitions during the coronavirus pandemic, saying that the outbreak could allow large companies to consolidate their power by buying up smaller firms. While larger tech companies have faced scrutiny in the past for allegedly acquiring potential competitors in order to protect their market share, acquisitions during the COVID-19 pandemic are far more likely to involve larger companies rescuing at-risk startups that would otherwise go out of business. It’s hard to see how blocking these types of acquisitions would promote competition. Efforts to curb what policymakers see as predatory behavior could instead deprive many startups of a critical lifeline they might need to remain in business.
Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) introduced the Pandemic Anti-Monopoly Act this week to freeze mergers during the pandemic, a move that came after House Antitrust Subcommittee Chairman David Cicilline (D-R.I.) proposed a similar ban on mergers during the COVID-19 outbreak. The new legislation would in part block hedge funds, private equity firms, and companies with over $100 million in revenue from acquiring any firms until the Federal Trade Commission “determines that small businesses, workers, and consumers are no longer under severe financial distress.” Startups, tech companies, and advocacy organizations have all said that the proposal might do more harm than good at this difficult time.
If lawmakers really want to promote competition, then they should focus on providing startups with the financial assistance they need to weather the pandemic’s economic fallout. As we noted earlier this week, current relief programs—such as the U.S. Small Business Administration’s Paycheck Protection Program—are not doing enough to address the on-the-ground realities of many startups. Instead of getting sidetracked by concerns about mergers and acquisitions—many of which remain on hold as a result of the pandemic—lawmakers should keep their collective focus on alternative relief options for startups that might otherwise seek out a larger buyer to remain financially solvent.
Policy Roundup:
Lawmakers introduce privacy bill in response to contact tracing. A group of Republicans on the Senate Commerce Committee—Chairman Roger Wicker (Miss.) and Sens. John Thune (S.D.), Jerry Moran (Kan.), and Marsha Blackburn (Tenn.)—announced that they are introducing legislation to protect consumers’ data privacy during the pandemic by requiring companies to obtain opt-in consent from users before using their data to track the spread of COVID-19. Tech firms, government officials, and healthcare professionals around the world have increased their reliance on app-based contact tracing tools to track the spread of the virus from person-to-person and across communities.
200,000 H-1B visa holders risk losing legal status during pandemic. As many as 200,000 H-1B visa holders could lose their legal statuses by the end of June as a result of pandemic-related layoffs and job reductions. While the Trump administration’s recently announced immigration suspension does not affect current H-1B holders, H-1B visa requirements do not allow holders to be furloughed, have their wages reduced, or—in some cases—work remotely, and visa holders who have been laid off only have 60 days to find another job.
Addressing broadband access in future stimulus packages. Democratic lawmakers and advocacy groups pushed for Congress to address concerns about Internet connectivity in future stimulus packages, saying that the pandemic has underscored the nation’s growing digital divide. Engine also joined a letter with more than 200 organizations calling for lawmakers to include funding for broadband access in future COVID-19 relief packages.
Pandemic pushes global startups to adopt autonomous capabilities. Startups across the globe are using delivery robots, drones, and other technologies to maintain their services and assist healthcare workers during the pandemic.
USTR releases Special 301 Report. The Office of the United States Trade Representative released its annual Special 301 Report on global trading partners who are not effectively defending intellectual property rights in their countries. In a controversial move, USTR listed several of Amazon’s foreign websites in its “notorious markets” section for the sale of counterfeit goods—the first time a U.S.-based firm’s overseas operations have been included in the report.
USPTO rejects patent for AI-created invention. The United States Patent and Trademark Office rejected a patent protection filing from an autonomous machine known as DABUS, saying in part that the Patent Act indicates that patents can only be granted to a “natural person.”
GAO report identifies vulnerabilities in FCC public commenting system. The U.S. Government Accountability Office released its final report on the Federal Communications Commission’s public commenting process last Friday that identified security vulnerabilities and flaws in the agency’s Electronic Comment Filing System. The report was commissioned after the agency’s commenting system crashed during the net neutrality repeal process in 2017.
Startup Roundup:
#StartupsEverywhere: South Bend, Indiana. The South Bend - Elkhart Regional Partnership includes 47 smart connected communities across Northern Indiana and Southwest Michigan that are working together to improve economic development across the region. We recently spoke with Bethany Hartley—the partnership’s Director of Diversity & Inclusion—to learn more about the organization’s work improving diversity and inclusion programs for entrepreneurs.
