Antitrust’s Increasingly Long Arm: (Minority) Private Equity Investors Beware

Competition Policy International - CPI Antitrust Chronicle on "Private Equity", October 2022

12 Pages Posted: 8 Nov 2022 Last revised: 4 Dec 2023

See all articles by Anna Tzanaki

Anna Tzanaki

University of Leeds School of Law; Stigler Center at Chicago Booth Business School; University College London - Centre for Law, Economics and Society

Date Written: October 27, 2022

Abstract

Where do competition, antitrust and private equity intersect? Once antitrust’s favored child compared to strategic buyers, private equity seems to have fallen from competition enforcers’ grace. Interestingly, this is part of a broader trend: financial investors in general, from BlackRock to Blackstone, have come into the antitrust spotlight. Being a minority financial investor is no longer reason for antitrust immunity. Economic theory and competition policy have been shifting. Common ownership of small stakes in rival firms by institutional investors, even if passive, can create harm. Rollup acquisitions by active private equity investors may also raise concerns under given circumstances. How is the law reacting to economists’ and policymakers’ nods? With interest on both sides of the Atlantic. Competition law enforcement signals no empty threats, but rather an eagerness to cover blind spots. What is particularly intriguing is that the US and the EU, for reasons of path dependence and system design, have chosen different legal paths to achieve the same goal. What about politics? It is also here (to stay). Antitrust’s recent (over)reach into finance suggests a (renewed) balancing act between competition in product markets and in the market for corporate control, with not only legal and economic underpinnings but also political ramifications.

Keywords: private equity, competition, antitrust, institutional investors, activism, corporate control, common ownership, rollup acquisitions, minority shareholding, competition law enforcement

JEL Classification: D20, D43, D60, G23, G34, K21, K22, L10, L13, L22, L40, L41

Suggested Citation

Tzanaki, Anna, Antitrust’s Increasingly Long Arm: (Minority) Private Equity Investors Beware (October 27, 2022). Competition Policy International - CPI Antitrust Chronicle on "Private Equity", October 2022, Available at SSRN: https://ssrn.com/abstract=4266548

Anna Tzanaki (Contact Author)

University of Leeds School of Law ( email )

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Stigler Center at Chicago Booth Business School ( email )

Walker Hall
Chicago, IL 60637
United States

University College London - Centre for Law, Economics and Society ( email )

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London, WC1H 0EG
United Kingdom

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