The Growing Problem of Horizontal Shareholding

Antitrust Chronicle, Vol. 3, June 2017, Competition Policy International

Harvard Public Law Working Paper No. 17-36

15 Pages Posted: 21 Jun 2017 Last revised: 17 Nov 2017

Date Written: June 15, 2017

Abstract

Horizontal shareholding exists when significant shareholders have stock in horizontal competitors. (It is often imprecisely called "common shareholding," but that term can also apply when shareholders own stock in two noncompeting corporations. It differs from "cross-shareholding," which describes situations when firms own stock in each other, though cross-shareholding is effectively a special case of horizontal shareholding when the firms are competitors.) This Article presents new evidence confirming that horizontal shareholding has anticompetitive effects harmful to our economy and showing that the problem is only getting worse. It also rebuts various critiques of my proposal that high levels of horizontal shareholding in concentrated markets should be investigated and subject to antitrust enforcement when they are shown to have anticompetitive effects.

Keywords: antitrust, horizontal, shareholdings, institutional investors, economic inequality, executive compensation, common shareholding, common ownership, HHI, MHHI, Herfindal-Hirschman Index, airline, Piketty. stock acquisition, anticompetitive, passive investor

JEL Classification: D21, D43, G11, G20, G30, G32, G34, K21, K22, L10, L13, L21, L22, L40, L41

Suggested Citation

Elhauge, Einer R., The Growing Problem of Horizontal Shareholding (June 15, 2017). Antitrust Chronicle, Vol. 3, June 2017, Competition Policy International, Harvard Public Law Working Paper No. 17-36, Available at SSRN: https://ssrn.com/abstract=2988281

Einer R. Elhauge (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

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