The Common Ownership Boom - Or: How I Learned to Start Worrying and Love Antitrust
Competition Policy International - CPI Antitrust Chronicle on "Common Ownership Revisited", May 2019
11 Pages Posted: 18 Jun 2019
Date Written: May 21, 2019
Is common ownership the Doomsday Machine for the operation of free markets, competition and capitalism as we know it? An observer of cutting-edge law and economics literature may indeed tend to believe that we are approaching a point of ultimate antitrust apocalypse. This article tries to unfold the ongoing antitrust-focused debate by exploring a series of questions: i) who is a common owner; ii) what are the negative externalities of common ownership; iii) which are the potential anticompetitive mechanisms and theories of harm; iv) what are the appropriate legal solutions to any competition concerns. While there is so much we do not know, common ownership forces us, with some urgency, to revisit and review whether our existing antitrust tools, methods and policies are well fit for purpose.
Keywords: common ownership, antitrust, competition policy, corporate governance, institutional investors, index funds, passive investment, diversification, overlapping ownership, horizontal shareholding, agency costs, theory of the firm, comparative law
JEL Classification: D21, D43, G11, G20, G23, G30, G32, G34, K21, K22, L10, L13, L21, L22, L40, L41, O16
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