Debt, control, and collusion

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Partial ownership of stock in multiple competing firms is an important scholarly and policy topic in both corporate and antitrust law. Until now, the discussion has focused on ownership. This essay shifts the debate from a focus on common ownership to a focus on common control. No prior work has addressed the role of debt-related corporate control in corporate governance and competition, but debt-control-based governance is a critical part of the corporate landscape. Further, various creditors can exert control over more than one company in the same industry without any ownership. These insights in the corporate finance and bankruptcy law literatures have not penetrated antitrust debates or policy. Applying such insights, this essay suggests that a fundamental change in antitrust policy is necessary to police against debt-control-based collusion.