Roman Inderst and Stefan Thomas ‘Common Ownership and Mergers between Portfolio Companies’ (2019) World Competition 42(4) 551

The debate on the competitive risks of common ownership has focused on whether passive index investments soften competition among portfolio companies. If this were the case, it would raise the question how it would impact the analysis of horizontal mergers between portfolio companies. The European Commission has, in Dow/DuPont and in Bayer/Monsanto, allowed the possibility that the mere existence of common ownership can contribute to a competitive impediment emerging from a horizontal merger between portfolio companies. This paper, available here, argues that it should not be presumed that common ownership in itself increases anticompetitive effects of a merger between portfolio companies. Instead, this would depend on the facts of the case – from both a price and innovation perspective. Even if it were to be assumed that common ownership has an inherent propensity to impede competition, it cannot be concluded from this that a merger between commonly owned portfolio companies has a larger detrimental effect on prices or innovation activity…

Alec Burnside and Adam Kidane ‘Common Ownership: A EU Perspective’ (2020) Journal of Antitrust Enforcement 8 456

This article, available here, examines common ownership through a European lens. The article considers whether the theory of harm flowing from common ownership is sufficiently robust to provide a basis for enforcement, and (if so) whether current European Union competition law tools could be used to that end. The authors argue that it is premature to draw any conclusions as to whether common ownership concerns justify competition enforcement. In any event, levels of common ownership seem to be lower in Europe than in the US, so it is unclear whether intervention would be justified in the EU even if it were in the US. Until a better understanding of the underlying facts and a broad academic consensus emerge, reform prescriptions that have been advanced will remain a solution in search of a problem. Section II describes the common ownership theory of harm. The authors begin by distinguishing between cross-shareholding and common ownership. Cross-ownership arises where one firm acquires a non-controlling…