Common Ownership In Fintech Markets

Anna Tzanaki, Liudmila Alekseeva & José Azar, Lund University & University of Navarra

Is common ownership in fintech companies an empirically significant phenomenon? What are its impact on competition and innovation in fintech markets and its implications for competition law enforcement? This chapter studies these questions providing evidence and insights on the extent of common shareholdings held by different types of investors in different types of firms and the likely concerns in selected fintech market segments and countries. It also comments on how the specific ownership and governance structures of fintech firms may materially influence the magnitude and systemic nature of effects associated with common ownership.

Fintech markets differ in a number of important ways from traditional markets that are usually less dynamic, and fintech firms are often not publicly listed companies over which the common ownership phenomenon has been empirically studied more extensively. This fact affects, on the one hand, the empirical and theoretical dimensions of potential competitive effects. On the other hand, it also creates distinct challenges and opportunities for competition law enforcement that have been under-theorised and underappreciated to date. By shedding light on these novel issues surrounding common ownership in fintech as well as the complex relationships between fintech competition, innovation, and investment, the chapter aims to deepen the analysis of the implications of common ownership for the operation of firms and markets. As such, it also aims to provide useful guidance to antitrust policymakers for appropriate future action.

The structure of the chapter is as follows. Section II presents empirical evidence on the extent of common ownership in fintech markets across various types of firms, investors and countries. Section III studies the potential impact of common ownership on fintech firms’ behaviour and market competition. Section IV concludes discussing the implications of the findings for competition law enforcement.

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