When competitors own (parts of) each other

A merger, where a company acquires control of a competitor, can impede effective competition and, for example, result in higher prices and poorer product offering. Big mergers are therefore subject to merger control.

When a company buys a non-controlling shareholding in a competitor, however, this may also harm competition.

In some countries, therefore, in addition to merger control, the competition authorities are able to assess the impact of, and take action against, non-controlling minority shareholdings and cross-ownership between competitors. Neither Denmark nor the EU have regulations covering such minority shareholdings.

The competitive issues which minority shareholdings may cause have been relevant in i.a. several Danish merger cases.
With this in mind, this article describes the potential adverse effects on competition of competitors owning minority shareholdings in each other.