Proposed Changes to the Merger Guidelines’ Approach to Common Ownership

Abstract

I appreciate the opportunity to submit a comment in response to the FTC’s Request for Information on Merger Enforcement. This comment focuses on responding to Question 12.h of the Request, which asks whether changes should be made to the guidelines’ approach to common ownership and horizontal stockholding. I argue that recent evidence confirms the link between common ownership and anticompetitive effects and identifies a relevant causal mechanism. I then offer a new framework based in economics for evaluating policy proposals intended to address anticompetitive effects of common ownership. I conclude by calling for regulators to make data on corporate ownership more available so that the problem of common ownership can be further studied, and by calling for the FTC to incorporate “modified” HHIs into the guidelines to account for the effects of common and cross-ownership.

Keywords: common ownership, competition, governance, antitrust policy, regulation

JEL Classification: M12, L13, J33, G32, D21, L21