Confronting Horizontal Ownership Concentration

AuthorSumit K. Majumdar,Martin C. Schmalz,Einer Elhauge
DOI10.1177/0003603X20985803
Published date01 March 2021
Date01 March 2021
Subject MatterArticles
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
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DOI: 10.1177/0003603X20985803
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