A Competition Law Analysis of Common Shareholdings

An emerging economics literature has raised concerns that “common shareholdings” by institutional investors in multiple public companies may give rise to soft competition and the exercise of market power in concentrated oligopolies. However, it would be a mistake to try to address such concerns using merger control regimes. While competition laws which prohibit “competitor agreements” may provide a basis for dealing with explicit coordination between competitors that is facilitated by common institutional shareholders, the application of merger control laws to mergers involving two com…

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