Evaluating the competitive effects of corporate acquisitions and mergers #FTC-2018-0053-D-0002

Submission Number:
Hal Scott
Committee on Capital Markets Regulation
Initiative Name:
Evaluating the competitive effects of corporate acquisitions and mergers
The Committee on Capital Markets Regulation (the Committee) is grateful for the opportunity to comment on the Federal Trade Commissions request for comment for its Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201. Founded in 2006, the Committee is dedicated to enhancing the competitiveness of U.S. capital markets and ensuring the stability of the U.S. financial system. Our membership includes thirty-five leaders drawn from the finance, investment, business, law, accounting, and academic communities. The Committee is chaired jointly by R. Glenn Hubbard (Dean, Columbia Business School) and John L. Thornton (Chairman, The Brookings Institution) and directed by Hal S. Scott (Nomura Professor and Director of the Program on International Financial Systems, Harvard Law School). The Committee is an independent and nonpartisan 501(c)(3) research organization, financed by contributions from individuals, foundations, and corporations. In November 2017, the Committee published a paper entitled Common Ownership and Antitrust Concerns. The paper was written in response to a fledgling line of empirical economic research alleging antitrust concerns arising from institutional equity ownership. More specifically, the recent research argues that when institutional investors own equity stakes in multiple competing firms in an industry, this common ownership produces anti-competitive effects. Our paper found that, overall, the economic results of the common ownership research have been countered by subsequent academic studies, and antitrust analysis based on the early research has been premature. We also found that the methodology of the research is subject to several critiques and thus no firm conclusions about those studies findings can be made. As a result, no solutions are necessary to a problem that has not been proven to exist. We believe our paper is relevant to the Federal Trade Commissions request for comment. Therefore, we are providing a copy of it as an attachment for your review. Moreover, given our work in this area, we would appreciate an opportunity to participate in the agencys hearings. Thank you very much for your consideration of our views. Should you have any questions or concerns, please do not hesitate to contact the Committees Director, Prof. Hal S. Scott (hscott@law.harvard.edu), or Deputy Director, John Gulliver (jgulliver@capmktsreg.org), at your convenience.