Abuse of Protected Position? Minority Shareholdings and Restriction of Markets' Competitiveness in the European Union

Abstract

In corporate governance minority shareholders deserve particular protection in order to guarantee their rights in the companies' management and to avoid their passive submission to the majority's decisions. This article stresses that the protection granted to them could be used as an instrument to circumvent Competition law. More generally it is argued that participation in companies' equity, even when it does not grant control over the same companies, can in particular circumstances generate effects restrictive of competition. The paper shows that there is a substantial lack of European Courts jurisprudence and that the Commission's approach to the issue is inconsistent. The paper calls for a substantive, systematic and economically based analysis of minority shareholdings by the Commission to guarantee legal certainty, uniformity of interpretation and the resolution of some unexplained structural questions. Furthermore the paper calls for a legislative revision of the actual set of Competition rules. There is, in fact, a vacuum legis that needs to be filled because there are some circumstances in which market operations involving minority shareholdings, although outside of the scope of application of both Art.81 and Art.82 and of the Merger Regulation, can generate anticompetitive effects. In the absence of proper normative measures, these situations are ultimately undetectable by the European Competition authorities. These circumstances are described and a possible solution to the mentioned predicaments - in line with the United States approach to the question - is suggested.