Confronting Horizontal Ownership Concentration

• Date: 01 March 2021
• Published date: 01 March 2021
• DOI: 10.1177/0003603X20985803
• Subject Matter: Articles

Article

Confronting Horizontal

Ownership Concentration

Einer Elhauge*, Sumit K. Majumdar**,

and Martin C. Schmalz***

Abstract

Developments in capital markets have fueled a concentration of horizontal ownership across

competing firms, and this has been linked to anticompetitive effects and economic under-

performance. The debate about such ownership concentration has proven contentious and

controversial. This symposium titled “Common Ownership: Illuminating a Great 21st Century

Antitrust Debate” brings together key new works on the topic that confirm, extend, and illuminate

the prior empirical findings and policy implications. Among other things, these contributions survey

the recent empirical literature, provide new important empirical results about the extent and effect

of horizontal ownership, offer a methodological critique, highlight concepts that address core capital

market and labor market linkages, and articulate ideas for policy development to tackle emerging

contingencies.

Keywords

anticompetitive behavior, common ownership, corporate governance, horizontal ownership,

horizontal shareholding

Introduction

“Common ownership” (also called common shareholding) exists when a firm has an investment

interest in two or more firms that operate in a business market different from that of the investing

firm. In contrast, “cross-ownership ” (also called cross-shareholding) occ urs when a firm directly

invests in one or more firms that compete with it. Such cross-ownership has long been a subject of

antitrust enforcement, not only when it confers control or influence but “even if [it] cannot influence

the conduct of the target firm” if it is likely to reduce either firm’s unilateral incentives to compete and/

or result in information sharing between the firms in a way that exacerbates or facilitates oligopolistic

* Harvard University, Cambridge, MA, USA

** University of Texas at Dallas, Richardson, TX, USA

*** University of Oxford, United Kingdom

Corresponding Author:

Sumit K. Majumdar, University of Texas at Dallas, 800 W Campbell Rd., Richardson, TX 75080, USA.

Email: majumdar@utdallas.edu

The Antitrust Bulletin

2021, Vol. 66(1) 3–11

ªThe Author(s) 2021

Article reuse guidelines:

sagepub.com/journals-permissions

DOI: 10.1177/0003603X20985803

journals.sagepub.com/home/abx