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Author: Einer Elhauge
Publisher:
ISBN:
Category :
Languages : en
Pages : 51
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Book Description
Horizontal shareholdings exist when a common set of investors own significant shares in corporations that are horizontal competitors in a product market. Economic models show that substantial horizontal shareholdings are likely to anticompetitively raise prices when the owned businesses compete in a concentrated market. Recent empirical work not only confirms this prediction, but also reveals that such horizontal shareholdings are omnipresent in our economy. I show that such horizontal shareholdings can help explain fundamental economic puzzles, including why corporate executives are rewarded for industry performance rather than individual corporate performance alone, why corporations have not used recent high profits to expand output and employment, and why economic inequality has risen in recent decades. I also show that stock acquisitions that create anticompetitive horizontal shareholdings are illegal under current antitrust law, and I recommend antitrust enforcement actions to undo them and their adverse economic effects.
Author: Einer Elhauge
Publisher:
ISBN:
Category :
Languages : en
Pages : 51
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Book Description
Horizontal shareholdings exist when a common set of investors own significant shares in corporations that are horizontal competitors in a product market. Economic models show that substantial horizontal shareholdings are likely to anticompetitively raise prices when the owned businesses compete in a concentrated market. Recent empirical work not only confirms this prediction, but also reveals that such horizontal shareholdings are omnipresent in our economy. I show that such horizontal shareholdings can help explain fundamental economic puzzles, including why corporate executives are rewarded for industry performance rather than individual corporate performance alone, why corporations have not used recent high profits to expand output and employment, and why economic inequality has risen in recent decades. I also show that stock acquisitions that create anticompetitive horizontal shareholdings are illegal under current antitrust law, and I recommend antitrust enforcement actions to undo them and their adverse economic effects.
Author: Fiona M. Scott Morton
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
“Horizontal shareholding” occurs when one or more equity funds own shares of competitors operating in a concentrated product market. For example, the four largest mutual fund companies might be large shareholders of all the major United States air carriers. A growing body of empirical literature concludes that under these conditions market output in the product market is lower and prices higher than they would otherwise be. Here we consider how the antitrust laws might be applied to this practice, identifying the issues that courts are likely to encounter and attempting to anticipate litigation problems. We assume that neither the mutual fund managers nor the firms in the product or service market are fixing prices in a way that would subject them to antitrust liability. Section 1 of the Sherman Act and §7 of the Clayton Act take quite different approaches to this problem, but each could be brought to bear. While the current literature on horizontal shareholding does not offer a single robust explanation of how the price increase mechanism works, we show that the “effects” test expressed in the Clayton Act does not require proof of the precise mechanism. Further, §7's “solely for investment” exception typically will not apply. We also briefly discuss special problems of private plaintiff challenges. Finally, we elaborate the two ways that efficiencies are relevant to analysis of such mergers. First, we show why the efficiency defense as currently formulated will seldom or never save such a merger. Secondly we discuss the problem of remedial efficiencies, or mechanisms for ensuring that judicial relief will not impose its own consumer harm.
Author: Alessandro Romano
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper uses network theory to argue that the consequences of horizontal ownership by large investment institutions are more complicated than, and sometimes completely the opposite of, what conventional economic theory predicts. Horizontal ownership occurs when a large investment institution, such as Vanguard or Blackrock, simultaneously holds large stakes in many different companies in the same industry. Legal scholars and economists have argued that these large investors have little incentive to encourage competition in the industries in which they have horizontal ownership, because the investors are just as likely to hold shares in companies that might lose from competition as they are to hold shares in companies that might gain.Against this background, this paper advances two claims. First, it shows that the policy proposals that have been advanced to address the alleged anticompetitive effects of horizontal shareholding could backfire and further reduce the level of competition in the markets. Second, it highlights that the consequences of horizontal shareholding are very nuanced, because things that happen in one industry inevitably affect other industries. For instance, increased ticket prices among airlines might be good for airlines, but bad for their suppliers. Therefore, determining whether reduced competition in a given industry would benefit an investor requires us to compare the gains it generates in the relevant market with the losses it would impose onto other firms in the investor's portfolio. I work through the mechanics of these calculations and identify a method already developed in network theory that could help us perform them. I also show that in some markets (i.e. “central markets”) horizontal shareholders might have more incentives than undiversified shareholders to promote aggressive competition. I then outline a new set of regulatory tools, which I call “Network Sensitive Regulations,” that could address the anticompetitive effects of horizontal shareholding in a manner that would be sensitive to the nuances of these network effects.
Author: Einer Elhauge
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author: Mario Cistaro
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
Recent studies have linked the concentration of common shareholding in competing corporations among the same group of minority shareholders with competition concerns. This paper will examine whether the correlation between the structure of corporate ownership captured by common shareholding and the structure of the market(s) in which the companies operate might determine anticompetitive effects and be considered illegal under antitrust laws. To this regard, after describing the main theoretical and empirical foundations for the competition concerns associated to common shareholding, I will analyze the arguments raised both in favor and against the enforcement of the antitrust laws and, in particular as regards the latter, the lack of evidence on the causal mechanism through which common shareholdings determine anticompetitive effects. While in the US, the Clayton Act seem to ban merger and stock acquisition that are likely to have anticompetitive effects regardless of whether the mechanism for those effects is known, a different conclusion should be reached with regard to the European Union antitrust laws. Under the EU merger regulation competitive effects of common shareholdings are captured if, and only, they confer control, being control the causal mechanism preidentified by the EU law to link competitive effects to a transaction that modifies the structure of the market.
Author: Duarte Brito
Publisher:
ISBN:
Category :
Languages : en
Pages : 27
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Book Description
The dominant formulation for modeling the objective function of the firm's manager in the presence of horizontal shareholding has been critiqued for producing the result that it may solely reflect the interests of a small number of shareholders even if, collectively, those shareholders do not have full control of the firm. We show that this issue can be avoided with an alternative formulation. This formulation is derived from a probabilistic voting model in which shareholders may differ in their evaluation of the amount of resources the manager will divert from the firm for personal use, which yields the result that the manager maximizes a control-weighted sum of the shareholders' relative (rather than absolute) expected returns.
Author: Harvard Law Review
Publisher: Quid Pro Books
ISBN: 1610278178
Category : Law
Languages : en
Pages : 402
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Book Description
The March 2016 issue, No. 5, features these contents: • Article, "Marriage Equality and the New Parenthood," by Douglas NeJaime • Essay, "Horizontal Shareholding," by Einer Elhauge • Book Review, "Keeping Track: Surveillance, Control, and the Expansion of the Carceral State," by Kathryne M. Young and Joan Petersilia • Note, "Constitutional Courts and International Law: Revisiting the Transatlantic Divide" • Note, "Defining the Press Exemption from Campaign Finance Restrictions" • Note, "Let the End Be Legitimate: Questioning the Value of Heightened Scrutiny's Compelling- and Important-Interest Inquiries" In addition, student commentary analyzes Recent Cases on state abortion laws and precedent; expectation of privacy in pocket dial; tax deductions for medical marijuana dispensary; appointments clause test for executive branch reassignments; takings by residential inclusionary zoning; and statutory interpretation using corpus linguistics. A commentary focuses on the Recent Court Filing by the DOJ arguing that a city ordinance prohibiting camping and sleeping outdoors violates the Eighth Amendment. Finally, the issue includes two brief comments on Recent Publications. The Harvard Law Review is offered in a quality digital edition, featuring active Contents, linked footnotes, active URLs, legible tables, and proper ebook and Bluebook formatting. The Review is a student-run organization whose primary purpose is to publish a journal of legal scholarship. It comes out monthly from November through June and has roughly 2500 pages per volume. Student editors make all editorial and organizational decisions. This is the fifth issue of academic year 2015-2016.
Author: Riccardo Fadiga
Publisher:
ISBN:
Category :
Languages : en
Pages : 19
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Book Description
The literature shows that horizontal shareholding engenders significant anticompetitive effects and that no suitable instrument exists within European competition law which reliably and effectively can be applied to curtail such intrinsic effects. This Article analyses several proposals which have been put forward by the scholarship and the institutions in order to compare and contrast their advantages and disadvantages, and shows that enforcement against horizontal shareholding on the basis of Article 102 TFEU affords substantial benefits compared to other solutions, with no comparable disadvantages.
Author: Panagiotis Fotis
Publisher: Bloomsbury Publishing
ISBN: 1509900888
Category : Law
Languages : en
Pages : 336
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Book Description
The objective of this book is twofold. First, it presents the economics of minority shareholdings, under both merger and antitrust law. In particular, economic analysis provides both an overall assessment of minority shareholdings in the context of concentrations, and Articles 101 and 102 TFEU and the examination of the link between non-controlling minority shareholdings, merger control and antitrust law. Second, the book also provides a legal assessment and an analysis of selected case law. According to settled European case law, minority shareholdings are analysed not only under Regulation 139/2004, but also under Articles 101 and 102 TFEU. Nevertheless, according to current enforcement practice at European and international levels, several national competition authorities have adopted different approaches. The million dollar question is whether the existing regulatory framework is sufficient to cover all possible cases. In summary, the book will be a useful tool for students, practitioners, researchers, economic and legal experts and competition authorities. It provides a comprehensive survey of the subject, which has been missing until now and answers many questions that have been raised in the literature in the last decades.
Author: Amy Klobuchar
Publisher: Vintage
ISBN: 0525563997
Category : Business & Economics
Languages : en
Pages : 625
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Book Description
NATIONAL BESTSELLER • Antitrust enforcement is one of the most pressing issues facing America today—and Amy Klobuchar, the widely respected senior senator from Minnesota, is leading the charge. This fascinating history of the antitrust movement shows us what led to the present moment and offers achievable solutions to prevent monopolies, promote business competition, and encourage innovation. In a world where Google reportedly controls 90 percent of the search engine market and Big Pharma’s drug price hikes impact healthcare accessibility, monopolies can hurt consumers and cause marketplace stagnation. Klobuchar—the much-admired former candidate for president of the United States—argues for swift, sweeping reform in economic, legislative, social welfare, and human rights policies, and describes plans, ideas, and legislative proposals designed to strengthen antitrust laws and antitrust enforcement. Klobuchar writes of the historic and current fights against monopolies in America, from Standard Oil and the Sherman Anti-Trust Act to the Progressive Era's trust-busters; from the breakup of Ma Bell (formerly the world's biggest company and largest private telephone system) to the pricing monopoly of Big Pharma and the future of the giant tech companies like Facebook, Amazon, and Google. She begins with the Gilded Age (1870s-1900), when builders of fortunes and rapacious robber barons such as J. P. Morgan, John Rockefeller, and Cornelius Vanderbilt were reaping vast fortunes as industrialization swept across the American landscape, with the rich getting vastly richer and the poor, poorer. She discusses President Theodore Roosevelt, who, during the Progressive Era (1890s-1920), "busted" the trusts, breaking up monopolies; the Clayton Act of 1914; the Federal Trade Commission Act of 1914; and the Celler-Kefauver Act of 1950, which it strengthened the Clayton Act. She explores today's Big Pharma and its price-gouging; and tech, television, content, and agriculture communities and how a marketplace with few players, or one in which one company dominates distribution, can hurt consumer prices and stifle innovation. As the ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, Klobuchar provides a fascinating exploration of antitrust in America and offers a way forward to protect all Americans from the dangers of curtailed competition, and from vast information gathering, through monopolies.
