Common Ownership in Fintech Markets

Konstantinos Stylianou, Marios Iacovides, and Björn Lundqvist (eds.) Fintech Competition: Law, Policy, and Market Organisation (Bloomsbury Hart, forthcoming).

37 Pages Posted: 16 Nov 2022

See all articles by Anna Tzanaki

Anna Tzanaki

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

Liudmila Alekseeva

University of Navarra, IESE Business School

José Azar

University of Navarra, IESE Business School; CEPR

Date Written: October 1, 2022

Abstract

Is common ownership in fintech companies an empirically significant phenomenon? What are its impact on competition and innovation in fintech markets and its implications for competition law enforcement? This chapter studies these questions providing evidence and insights on the extent of common shareholdings held by different types of investors in different types of firms and the likely concerns in selected fintech market segments and countries. It also comments on how the specific ownership and governance structures of fintech firms may materially influence the magnitude and systemic nature of effects associated with common ownership.

Fintech markets differ in a number of important ways from traditional markets that are usually less dynamic, and fintech firms are often not publicly listed companies over which the common ownership phenomenon has been empirically studied more extensively. This fact affects, on the one hand, the empirical and theoretical dimensions of potential competitive effects. On the other hand, it also creates distinct challenges and opportunities for competition law enforcement that have been under-theorised and underappreciated to date. By shedding light on these novel issues surrounding common ownership in fintech as well as the complex relationships between fintech competition, innovation, and investment, the chapter aims to deepen the analysis of the implications of common ownership for the operation of firms and markets. As such, it also aims to provide useful guidance to antitrust policymakers for appropriate future action.

The structure of the chapter is as follows. Section II presents empirical evidence on the extent of common ownership in fintech markets across various types of firms, investors and countries. Section III studies the potential impact of common ownership on fintech firms’ behaviour and market competition. Section IV concludes discussing the implications of the findings for competition law enforcement.

Keywords: common ownership, horizontal shareholding, institutional investors, venture capital, startups, competition, innovation, antitrust, competition law enforcement, fintech

JEL Classification: D21, D22, D43, D60, G23, G24, G34, K21, L10, L13, L21, L22, L40, L41

Suggested Citation

Tzanaki, Anna and Alekseeva, Liudmila and Azar, José, Common Ownership in Fintech Markets (October 1, 2022). Konstantinos Stylianou, Marios Iacovides, and Björn Lundqvist (eds.) Fintech Competition: Law, Policy, and Market Organisation (Bloomsbury Hart, forthcoming)., Available at SSRN: https://ssrn.com/abstract=4267062 or http://dx.doi.org/10.2139/ssrn.4267062

Anna Tzanaki (Contact Author)

Lund University - Faculty of Law ( email )

Lilla Gråbrödersgatan 4
Lund, 222 22
Sweden

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

Bentham House
Endsleigh Gardens
London, WC1H 0EG
United Kingdom

Stigler Center at Chicago Booth Business School ( email )

Walker Hall
Chicago, IL 60637
United States

Liudmila Alekseeva

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

José Azar

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

CEPR ( email )

London
United Kingdom

HOME PAGE: http://https://sites.google.com/site/joseazar/

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