LEGAL PRACTICE: MERGER CONTROL - COMMON OWNERSHIP - THEORY OF HARM - IMPACT ASSESSMENT

Common ownership: A practitioner’s view

Common ownership has become a hot topic in antitrust. Until recently, though, it remained largely a theoretical debate. The merger control decisions issued by the European Commission in Dow/DuPont and Bayer/Monsanto, however, have suddenly made it a real concern for companies – even though the practical implications are still unclear at this stage. For practitioners working with institutional investors, this new trend appears all the more worrisome that the theory of harm behind the Commission decisions seems to ignore the real ability and incentive of asset managers to influence competition between portfolio companies. In that context, any further enforcement action could potentially become highly problematic.

Introduction 1. Common ownership has recently become a hot topic in competition law. And while it may still appear of little practical impact for companies at this stage, the recent positions taken by the European Commission and other European stakeholders on the subject have made it necessary to watch out carefully for further developments. 2. Competition authorities have a long practice of taking into account cross-ownerships in the assessment of mergers, i.e., the fact that competitors holding minority shareholdings in each other may potentially have reduced incentives to compete strongly in the market. [1] However, common ownership as a topic of interest in merger control is still quite new. 3. As currently understood by the antitrust community, “common ownership” refers to a

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Laurence Bary, Common ownership: A practitioner’s view, May 2019, Concurrences Review N° 2-2019, Art. N° 89881, pp. 228-235

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