A minority shareholding exists when a shareholder holds less than 50% of the voting rights or equity rights in a target firm. In some instances a minority shareholder can exercise a degree of control over the target, either solely or jointly with other shareholders. In other cases, minority shareholdings represent purely passive investments. A minority shareholding can under some circumstances result in less output and higher prices. For example, if a firm owns equity in a competitor, the financial losses incurred by the competitor will affect the value of the firm’s investment. In this scenario, the firm may have less incentive to compete against the company it has invested in. It may also have an incentive to unilaterally reduce output and raise prices, if it is in a position to recoup all or part of the lost sales through its financial participation in the target. Structural links between competitors in the form of direct or reciprocal minority shareholdings may in certain circumstances facilitate express or tacit collusion; the minority shareholder is given access to information about the target, which facilitates collusion, or the monitoring of the target’s adherence to the commonly agreed conduct. As with unilateral effects, minority ownerships might change the payoffs for the companies involved, or their respective incentives to deviate from a collusive agreement or to engage in a pricing war to punish deviations from a collusive agreement. Investments in competing companies may also signal to the rest of the market that there is an intention to compete less vigorously. This may induce the whole industry to reduce competition and favour a collusive equilibrium to the detriment of consumers. © OECD
Minority shareholdings
A
Absolute territorial protection
•
Abuse of dominant position
•
Abuse of economic dependence
•
Access to essential facility
•
Access to information
•
Access to the file
•
Agency agreement
•
Agent
•
Agreement (notion)
•
Amicus curiae
•
Ancillary restraints
•
Annulment
•
Anticompetitive objet or effect
•
Anticompetitive practices
•
Applicable law
•
Arbitration
B
C
Cartel
•
Clearance phase I (merger)
•
Clearance phase II (merger)
•
Collecting society
•
Collective dominance
•
Collective redress (class action)
•
Comity
•
Competence
•
Competition policy
•
Competition policy
•
Complaint
•
Compliance programme
•
Compulsory license
•
Concerted practices
•
Concession
•
Concurrent jurisdiction
•
Consumers protection
•
Consumers’ associations
•
Control (change)
•
Control (notion)
•
Cooperation Agreement
•
Cooperation between competition authorities
•
Coordinated effects
•
Copyright
•
Corporate group
•
Corruption
•
Cost-based access
•
Criminal sanctions
•
Cross subsidisation
D
E
ECHR
•
Economic analysis
•
Economic efficiency
•
Effect on trade between Member States
•
Effective judicial protection
•
Environmental protection
•
Essential facility
•
European Competition Network (ECN)
•
Excess prices
•
Exchanges of information
•
Exclusive distribution
•
Exclusive purchasing
•
Exclusive right (Art. 106 TFEU)
•
Exclusivity clause
•
Exhaustion
•
Extra-territoriality
F
I
M
N
P
Parallel imports (parallel trade)
•
Passing-on
•
Pay-for-delay
•
Periodic penalty payment
•
Personal data
•
Potential Competition
•
Predatory pricing
•
Preliminary ruling (Art. 267 TFUE)
•
Price discrimination
•
Price-fixing agreement
•
Prices
•
Principle of effectiveness
•
Principle of equal treatment
•
Principle of equivalence
•
Principle of proportionality
•
Private enforcement
•
Privatization
•
Procedural autonomy
•
Professional association
•
Public procurement
•
Public undertaking
R
S
Sector inquiry
•
Selective distribution
•
Services of general economic interest
•
Single branding
•
Sole control
•
Spill-over effects
•
Standard-Essential Patent (SEP)
•
State action defense
•
State aid (compatibility)
•
State aid (existing aid)
•
State aid (notification)
•
State aid (notion)
•
State aid (recovery)
•
State aid (tax ruling)
•
State aid (unlawful aid)
•
State measure
•
Sudden break of established business relationships