Common sense about common ownership

Some scholars have argued that the phenomenon known as common ownership, particularly by large investment managers, is anticompetitive and prohibited by the U.S. antitrust laws. These proponents call for the divestiture of trillions of dollars of equities. We believe the argument for antitrust enforcement against common ownership is misguided. First, proponents conflate management by investment managers and economic ownership by individual account holders and therefore incorrectly attribute allegedly anticompetitive conduct to the investment managers. Second, proponents substantially overstate the validity and strength of the existing empirical work purporting to show common ownership causes anticompetitive harm. Third, proponents overstate their legal case, both by relying upon inapplicable cross ownership cases and by stretching the holdings of those cases. Fourth, at bottom proponents concerns are with either conscious parallelism, which is not illegal, or anticompetitive conduct that, if proven, could be addressed using established antitrust doctrines applicable to hub-and-spoke conspiracies and the anticompetitive exchange of information.

Introduction 1. A vigorous debate about “common ownership” has developed over the past few years. We follow the U.S. antitrust agencies’ (Agencies) definition of common ownership as “the simultaneous ownership of stock in competing companies by a single investor, where none of the stock holdings is large enough to give the owner control of any of those companies.” [1] The current debate focuses more narrowly on the special case in which “[a] small group of institutions”—such as BlackRock, Fidelity, State Street, and Vanguard—have “acquired large shareholdings in horizontal competitors throughout our economy.” [2] 2. The debate was triggered by two empirical papers finding a positive and statistically significant correlation between common ownership and prices on certain airline routes and on

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  • Wilson Sonsini Goodrich & Rosati
  • U.S. Court of Appeals for the District of Columbia Circuit (Washington DC)


Keith Klovers, Douglas H. Ginsburg, Common sense about common ownership, May 2018, Concurrences N° 2-2018, Art. N° 86847,

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