Minority Shareholdings

While there is no presumption of per se illegality of structural links between competitors, minority shareholdings and interlocking directorates can have negative effects on competition depending on the circumstances, either by reducing the individual incentives to compete or by facilitating collusion. In OECD countries, merger review rules are most frequently used to examine the competitive effects of minority shareholdings. However, when concept of “control” is used to assert jurisdiction on a transaction, there may be a risk of an enforcement gap with respect to minority shareholdings that do not affect control but may nevertheless have negative effects on competition. In these cases, competition law provisions concerning restrictive agreements and unilateral conduct have also been applied to review the competitive effects of minority shareholdings. The application of rules on restrictive agreements, however, is limited to cases where and “agreement” and anticompetitive effects can be established. Similarly, the application of the rules on unilateral conduct is limited by the need to show substantial market power of unlawful conduct.