Marco Claudio Corradi
År: 2017 // Område: Rättsvetenskap // Anslagsförvaltare: Lunds universitet // Belopp: 1 355 919 kr
En kvantitativ och kvalitativ analys av konkurrenshämmande effekter av icke-kontrollerande finansiella innehav
Projektet behandlar de konkurrensbegränsande effekterna av non-controlling financial holdings i Sverige och i EU. Det fokuserar såväl på (1) bolags horisontella och vertikala finansiella innehav som (2) investeringsfonders horisontella aktieinnehav – dvs investeringar i flera företag som är verksamma på samma marknad (portföljstrategi). Om ett företag har investerat i en konkurrent, kan agerandet hämma intresset att föra priskrig. I själva verket sker ofta en avvägning mellan de fördelar ett priskrig kan ge (ökade marknadsandelar) och dess ekonomiska konsekvenser (förlust i värdet av kapitalinnehavet hos en konkurrent). Ett företag kan också använda dess minoritetsaktieägares rättigheter för påverkan.
Investeringsfondernas horisontella ägande kan – tillsammans med bolagsstyrningsstrategier som syftar till att belöna marknadsläget – också verka konkurrenshämmande. Projektet syftar till (1) empirisk forskning avseende minoritetsinnehav i företag och investeringsfonder (svenska och från andra EU-länder); (2) kvalitativ forskning om minoritetsaktieägares rättigheter i Sverige och i EU, (3) en integrerad utvärdering (konkurrensrätt, bolagsstyrning, finansmarknadsrätt) av de konkurrensbegränsande effekterna av non-controlling financial holdings i Sverige och i EU, baserad på både kvalitativa och kvantitativa parametrar.
Mer om forskningsprojektet
This project deals with the anticompetitive effects of non-controlling financial holdings in Sweden and in the EU. It focuses both on: (1) companies’ horizontal and vertical financial holdings and (2) investment funds’ horizontal equity holdings – i.e. investment equity stakes in multiple companies active on the same market (pursuing a portfolio strategy).
If a company has invested in a competitor’s capital, it will face counterincentives to lead price wars. In fact, often there will be a trade-off between the potential industrial benefits of a price war (increased market share) and its financial consequences (loss in the value of the holding in a competitor’s equity. A company may also employ its minority shareholders’ rights for affecting anti-competitively its rival or for collecting strategic information.
Investment funds’ horizontal equity holding, along with corporate governance strategies aimed at rewarding market performance, may also create counterincentives to compete.
This project proposes: (1) an empirical research on minority holdings both by companies and by investment funds (Swedish and from other EU countries); (2) a qualitative research on minority shareholders’ rights in Sweden and in the EU; (3) An integrated assessment (competition law, corporate governance, financial markets law) of the anticompetitive effects of non-controlling financial holdings in Sweden and in the EU, based on both quantitative and qualitative parameters.
The proposed research intends to develop an analysis of the anticompetitive effects of non-controlling financial holdings, with special emphasis on recent developments in the fields of corporate law and financial markets law. It adopts a completely new approach, aiming at providing a new perspective for researchers and lawmakers. Its aim is global, as it deals in a new way with a topic that is of great interest not only for Swedish and EU regulators, but also for Swedish and European companies and financial firms and for all their global partners. The academic and policy interest for the anticompetitive effects of minority shareholdings is not a recent one. Several competition law and industrial organization articles have explored in depth this area of research. Authors have emphasized the cases of a firm investing in one or several of its competitors, pursuing either passive or active (although non-controlling) investment strategies. This can occur either on a horizontal or a vertical plan (rarely through multimarket contacts). Also the so-called circular ownership (each firm investing in at least one of its competitors) has been investigated (Gilo (2000)). Literature has identified potential harm to competition deriving from: (1) financial counterincentives to compete; (2) influence on a competitor’s industrial policy; (3) access to/exchange of business sensitive information, through the exercise of corporate rights or for instance in occasion of shareholders’ meetings (Pini (2012)). The pre-EU Merger Regulation (EUMR) ECJ doctrine (eg. Philip Morris) dealt with non controlling financial holdings. It is common opinion that, after the entrance into force of the first EUMR, the Philip Morris doctrine and its developments became a piece of history, losing its applicability to minority shareholdings. The new legal framework inaugurated by the first EU merger regulation and later confirmed by the second EU merger regulation limits the cases in which it is possible to assess the anticompetitive effects of non-controlling financial holdings to the following: (1) a post-merger assessment, which is viable only when the merger is finalized (EUMR, Art. 8(4) (b)); (2) under TFEU art. 101 in case of a contract contemplating a shareholding exchange; (3) rarely and hypothetically under TFEU 102, when the financial holding is involved in an abusive strategy (see the Commission’s investigation in the Gillette case).
At present there are no legal tools for scrutinizing the structural effects of non-controlling financial holdings on a wider basis. Ryanair v Aer Lingus (2010) has highlighted the structural deficiencies of the present EU competition law framework in this respect, prompting the necessity of an institutional consultation (Merger Control Reform White Paper (2014)). The debate started by the Commission on this topic was unfruitful from a de lege ferenda perspective. The recent decision by the new DG-Comp commissioner Vestager to abandon the project of specific rules for tackling the anticompetitive effects of minority shareholdings was officially justified on grounds of absence of reliable evidence of harm to competition. However, it may better be interpreted as a manifestation of the difficulties inherent in this topic. The DG-Comp position is in stark contrast with empirical findings. Recent research has signalled the problem of non-controlling financial holdings as an urgent one, which requires action at an institutional level. A very recent paper by Elhauge (2016), also referring to refined empirical studies, among which a revolutionary empirical research by Azar, Schmalz & Tecu (2015), has highlighted the devastating competitive harm deriving from horizontal shareholdings.
The most important US investment funds hold parallel non-controlling shareholdings in the top players of several industries. The main financial consequence of this situation is that combined profits from the industry as a whole are far more important for the above-mentioned investment funds than profit from a specific target firm (as it would be in case of an investment strategy consisting of investing exclusively in one company in the same product market). As a consequence of this situation, investment funds may refrain from taking action (as shareholders) that would benefit competition. In the worst hypothesis, they could engage in activism within the corporations they have invested in, for the purpose of sustaining anti-competitive behaviours. One of the examples provided by Elhauge is that nowadays, in most US industries, directors’ compensation is usually tied to industry performance instead of a director’s company specific performance (see Bebchuk and Fried (2004)). This clearly sets counter-incentives to competition. In fact, it incentivizes strategies that maximize the aggregate (often collusive) behaviour of the dominant firms active on a given product market – instead of furthering the competitiveness of each firm. Investment funds never tried to change this situation and this may be because they partake in supra-competitive aggregate profits.