Institutional Investor Shareholdings come under European Commission Scrutiny

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A recent study examining common corporate shareholdings in the United States argues that the holding of even minority stakes in rival companies by institutional investors affects competition. The European Commission is considering whether the same could apply under European Union competition law. EU competition law has tools in place to scrutinize minority shareholdings. The EU Merger Regulation can capture minority shareholding acquisitions when they confer control, and minority shareholdings are included in the Commission’s merger analyses. Existing competition laws also address unlawful coordination between competitors where facilitated by common shareholders or directors. Despite the availability of existing tools to address any concerns, the Commission may take enforcement measures, such as a sector inquiry or investigations into particular investors, to test this theory of harm.