Do Mutual Fund Managers’ Horizontal Shareholdings in Competing Firms Create Antitrust Risks?
Two recent academic papers, a law review article and an econometric study, theorize that mutual fund complexes owning significant shares in corporations that compete against each other, particularly in concentrated industries, may violate U.S. antitrust laws. These recent papers invite regulatory agencies and the private plaintiffs’ bar to bring antitrust claims against institutional investors who engage in horizontal shareholdings. Indeed, the Department of Justice has initiated an investigation into possible collusion in the airline industry, and, it was recently reported, sought discovery of communications between the airlines and firms that advise mutual funds.