Recent studies have linked the concentration of common shareholding in competing corporations among the same group of minority shareholders with competition concerns. This paper will examine whether the correlation between the structure of corporate ownership captured by common shareholding and the structure of the market(s) in which the companies operate might determine anticompetitive effects and be considered illegal under antitrust laws. To this regard, after describing the main theoretical and empirical foundations for the competition concerns associated to common shareholding, I will analyze the arguments raised both in favor and against the enforcement of the antitrust laws and, in particular as regards the latter, the lack of evidence on the causal mechanism through which common shareholdings determine anticompetitive effects. While in the US, the Clayton Act seem to ban merger and stock acquisition that are likely to have anticompetitive effects regardless of whether the mechanism for those effects is known, a different conclusion should be reached with regard to the European Union antitrust laws. Under the EU merger regulation competitive effects of common shareholdings are captured if, and only, they confer control, being control the causal mechanism preidentified by the EU law to link competitive effects to a transaction that modifies the structure of the market.

The objective of this book is twofold. First, it presents the economics of minority shareholdings, under both merger and antitrust law. In particular, economic analysis provides both an overall assessment of minority shareholdings in the context of concentrations, and Articles 101 and 102 TFEU and the examination of the link between non-controlling minority shareholdings, merger control and antitrust law. Second, the book also provides a legal assessment and an analysis of selected case law. According to settled European case law, minority shareholdings are analysed not only under Regulation 139/2004, but also under Articles 101 and 102 TFEU. Nevertheless, according to current enforcement practice at European and international levels, several national competition authorities have adopted different approaches. The million dollar question is whether the existing regulatory framework is sufficient to cover all possible cases. In summary, the book will be a useful tool for students, practitioners, researchers, economic and legal experts and competition authorities. It provides a comprehensive survey of the subject, which has been missing until now and answers many questions that have been raised in the literature in the last decades.

Provides a clear, concise and practical overview of the key economic techniques and evidence employed in European merger control.

This paper uses network theory to argue that the consequences of horizontal ownership by large investment institutions are more complicated than, and sometimes completely the opposite of, what conventional economic theory predicts. Horizontal ownership occurs when a large investment institution, such as Vanguard or Blackrock, simultaneously holds large stakes in many different companies in the same industry. Legal scholars and economists have argued that these large investors have little incentive to encourage competition in the industries in which they have horizontal ownership, because the investors are just as likely to hold shares in companies that might lose from competition as they are to hold shares in companies that might gain.Against this background, this paper advances two claims. First, it shows that the policy proposals that have been advanced to address the alleged anticompetitive effects of horizontal shareholding could backfire and further reduce the level of competition in the markets. Second, it highlights that the consequences of horizontal shareholding are very nuanced, because things that happen in one industry inevitably affect other industries. For instance, increased ticket prices among airlines might be good for airlines, but bad for their suppliers. Therefore, determining whether reduced competition in a given industry would benefit an investor requires us to compare the gains it generates in the relevant market with the losses it would impose onto other firms in the investor's portfolio. I work through the mechanics of these calculations and identify a method already developed in network theory that could help us perform them. I also show that in some markets (i.e. “central markets”) horizontal shareholders might have more incentives than undiversified shareholders to promote aggressive competition. I then outline a new set of regulatory tools, which I call “Network Sensitive Regulations,” that could address the anticompetitive effects of horizontal shareholding in a manner that would be sensitive to the nuances of these network effects.

Horizontal shareholdings exist when a common set of investors own significant shares in corporations that are horizontal competitors in a product market. Economic models show that substantial horizontal shareholdings are likely to anticompetitively raise prices when the owned businesses compete in a concentrated market. Recent empirical work not only confirms this prediction, but also reveals that such horizontal shareholdings are omnipresent in our economy. I show that such horizontal shareholdings can help explain fundamental economic puzzles, including why corporate executives are rewarded for industry performance rather than individual corporate performance alone, why corporations have not used recent high profits to expand output and employment, and why economic inequality has risen in recent decades. I also show that stock acquisitions that create anticompetitive horizontal shareholdings are illegal under current antitrust law, and I recommend antitrust enforcement actions to undo them and their adverse economic effects.

Florence Thépot provides the first systematic account of the interaction between competition law and corporate governance. She challenges the 'black box' conception of the firm- or 'undertaking' - in competition law, as applied to increasingly complex corporate relations. The book opens the 'black box' of the firm to understand the internal drivers of collusive behaviour, and proposes a unified approach to cartel enforcement, based on the agency theory. It explores key issues including corporate compliance programmes, the attribution of liability in corporate groups, and structural links between competitors, and should be read by anyone interested in how the evolution of the corporate landscape impacts competition law.

The most important book on antitrust ever written. It shows how antitrust suits adversely affect the consumer by encouraging a costly form of protection for inefficient and uncompetitive small businesses.