Minority Holdings and Antitrust
BlackRock and State Street filed the answer in the coal-market antitrust case in the Eastern District of Texas
13 states alleged that BlackRock, Vanguard, and State Street used their positions as large common owners and ESG “stewards” to coordinate a fossil‑fuel production pullback and mislead States/consumers about it. By collectively owning significant stakes in rival coal producers and engaging in aligned climate commitments and proxy voting, the three institutional investors acted in concert to reduce coal output in the “South Powder River Basin” and broader thermal coal markets.
The Court's decision on the Motion to Dismiss the Case
In August last year, the Eastern District of Texas denied the three institutional investors’ motion to dismiss. The Court observed that the states had plausibly alleged that BlackRock, Vanguard, and State Street “acquired significant amounts of stock in coal companies and then used their market power to pressure the companies to decrease coal production” and did not qualify for the Clayton Act’s safe harbor for passive investors. The states later settled their claims against Vanguard for money plus forward‑looking conduct limits, without any admission of wrongdoing.
BlackRock and State Street's Answer
BlackRock and State Street expressly state one key proposition: their “holdings of public company stock on behalf of its funds and clients do not give it control over the issuers.” To the extent they hold shares on behalf of their funds and clients, they act as an intermediary or agent, implementing strategies and stewardship within a fiduciary framework rather than acting as an owner, making entrepreneurial decisions about coal production. Additionally, they tie coal production outcomes to independent drivers—long-term demand decline, natural gas competition, environmental regulation, bankruptcies, rail and labor constraints, COVID-19, and the war in Ukraine—rather than to anything they control through shareholdings or stewardship.
The control dilemma
The core allegation is that by collectively owning significant stakes in rival coal producers and engaging in aligned climate commitments, engagement, and proxy voting, BlackRock, Vanguard, and State Street softened competition among those producers, restrained production, and raised electricity/coal prices paid by utilities and consumers.
The real problem for the states is proving causation, because the law requires a mechanism of control or influence over the issuers to link the institutional investors' minority holdings to the firm's conduct in the relevant coal markets. On the MTD decision, the court was applying a plausibility standard, not making findings of fact.
To prevail, the states must identify a concrete mechanism by which minority, client‑driven stockholdings translate into issuer‑level decisions about capacity and production. At present, it is unclear how holdings “on behalf of funds and clients”—the ordinary index‑fund posture BlackRock and State Street emphasize—conferred the practical leverage needed to override independent business judgment in coal markets. The States will ultimately have to show how what looks like conventional index‑style ownership in form actually functioned as a form of control in substance
Marketplace price‑control mechanisms: lessons from Amazon decision in Germany
Pricing power, algorithmic exclusion, and transparency
The Bundeskartellamt (FCO) found that Amazon’s systematic influence over third‑party sellers’ prices on Amazon.de constitutes an abuse of market power. According to the FCO, Amazon used automated tools to continuously review third‑party sellers’ prices against benchmarks, including prices on other websites and on Amazon itself. The decision builds on Amazon’s 2022 designation as an undertaking of “paramount significance for competition across markets” under Section 19a GWB, which subjects Amazon and its subsidiaries to extended abuse control for a five‑year period.
Amazon's algorithmic control of competition
Amazon deployed several algorithmic “price control” tools that monitor marketplace sellers’ prices, compare them to reference benchmarks, and, if they are deemed “too high”, either remove the offer from the marketplace entirely or exclude it from, or downgrade it in, the Buy Box—drastically cutting visibility and sales. Because Amazon operates as both a retailer and an operator of the marketplace, it directly competes with the same sellers whose prices it disciplines. This hybrid position means that Amazon’s control over competitors’ prices can allow it to determine the general price level on Amazon.de and to shape competition in the wider online retail market.
Disgorgement of Profits
The FCO ordered Amazon to pay 59 million EUR, describing this as a partial amount because the infringement is ongoing. This is significant. Traditionally, European competition regimes have relied on fines rather than benefit disgorgement by authorities, and this is the first time the FCO’s reformed profit‑skimming tool has been used in a competition case. Under the 2023 amendments to the GWB, the FCO can presume that an infringement generates an economic benefit of at least 1 % of the domestic turnover related to the infringement. In Amazon’s case, it applied that presumption to Amazon.de’s relevant German turnover to arrive at 59 million EUR.
How can a mechanism to keep a lower price level be illegal under the antitrust law?
The FCO explicitly says it is not attacking Amazon’s low‑price objective. What it considers unlawful are the specific enforcement tools—de‑listing and Buy Box suppression—because they are not necessary and are overly restrictive. Even if, in the short run, banning these tools may put some upward pressure on prices, the FCO is betting that medium‑term consumer welfare is higher with more independent competition, more transparency, and less platform control over rivals’ prices. It also fears that systematic matching of the lowest off‑platform price across Amazon.de can lead to a form of price coordination: rival online shops may stop undercutting, because any price cut is instantly mirrored on Amazon, muting the dynamic of price competition. In the FCO’s view, Amazon could pursue low prices through less intrusive means—such as lowering fees or offering rebates—without disciplining sellers’ prices through opaque threats of exclusion
The clash between two views of competition
On the one hand, there is a narrow, price‑centric view of consumer welfare that focuses on the lowest possible prices at a given point in time. On the other hand, there is a broader, dynamic‑competition view that stresses market structure, entry, and independence from gatekeeper control. The decision consciously trades some algorithmically enforced low prices today for a thicker, less platform‑controlled competitive process that is expected to benefit consumers over time.
In that sense, the case is not just about Amazon: it is an early test of how far European enforcers are willing to go to prioritise long‑term competitive dynamics over short‑term price effects in digital ecosystems.
Cowboy Culture, Schumpeter, and European Capitalism
Why is innovation in Europe a chimera?
The recent remarks of European Commission Competition Commissioner Teresa Ribera at the Fordham Law School conference on International Antitrust Law and Policy, and Antitrust Economics signal a nuanced shift in EU competition policy: to make EU antitrust enforcement more closely align with American economic dynamisms.
In this remark of the remarks, we explain why we think Europe "cannot make it," which brings us back to the title of this short comment.
No cowboys in Europe, but a social market economy
Risk-taking and entrepreneurial dynamism are primarily based on a state of disorder, more similar to the Old West than Versailles in France, or the Habsburg court in Vienna. Different instincts generate different societal structures, and entrepreneurial initiative appears to be driven by profit-maximizing instincts rather than cooperative impulses. Monopoly profits are a necessary reward for innovation and risk-taking, so the real question is whether Europe is ready to embrace a process of creative destruction and tolerate cycles of boom and bust, that is, embrace market disorder as a driver of progress.
While theorists like Schumpeter and Feyerabend originated in Europe, the continent’s regulatory culture resists such radical change, and the "therapeutic obstinacy" against Google is an involuntary admission. While the European Commission imposed another fine on Google, Judge Mehta in US. v. Google observed that the emergence of generative AI changed the course of the case. GenAI was a key factor in his decision to choose less drastic remedies than those requested by the Department of Justice (DOJ), such as structural separation.
Special responsibility, fairness, stability, and ordo liberalism
The ordo-liberal concept of economic order, on which the European competition is rooted, is based on ideals of social hierarchy, stability, and responsible stewardship in economic life, priorities that are not so different from those of European aristocracies in the past. The role of public institutions is to manage relationships in the economy hierarchically, ensuring no disruptive individualism, but rather predictability and control. It is self-revealing what the Executive Vice-President, Ribera, observed: "Our new rules will clearly explain when we won't intervene and highlight mergers that promote innovation, giving these dynamic companies certainty and reducing red tape." It does not sound like a market-driven approach, but rather a clear attempt to channel market activities into frameworks.
Conclusions
Europe excels in coordinated innovation and complex regulatory frameworks. Yet, the continent’s resistance to the cycles of creative destruction and entrepreneurial risk remains a fundamental barrier. Until the EU policy fully embraces the disorder and uncertainty of a market-driven economy, disruptive innovation and market-making innovation remain an elusive goal.
Comparing Access Obligations for Dominant Players in the U.S. and the EU
The case under the spotlight: Lukoil's Acquisition of Key Infrastructure in Bulgaria
Advocate General Laila Medina, in a non-binding opinion for the EU Court of Justice (CJEU), addressed whether antitrust law can require Lukoil to grant access to competitors (under the so-called Essential Facility doctrine).
The case originated from Lukoil's refusal to grant importers and other producers access to its terminals and warehouses.
EU Test
In the EU, the 1998 Bronner test governs when a dominant entity must allow competitor access to its facilities under Article 102 TFEU.
Under Bronner, three criteria must be met.
1) Indispensability (access to the facility is the only means to compete, and there are no actual or potential alternatives available)
2) Elimination of Competition (the refusal is likely to eliminate all competition in the downstream market by the requesting party)
3) Lack of Objective Justification (the refusal is not objectively justified (e.g., capacity constraints, efficiency reasons, protection of investments)
However, the Bronner Test does not apply to a dominant player who does not fully control the facility, for example, because it is subject to regulatory constraints (such as regulated ports or telecom networks). In other words, Bronner requires actual ownership and autonomy over the asset.
Lukoil argued before the court in April that it had made significant investments after acquiring the Bulgarian state-owned assets.
The Advocate General advised the Court that so long as the company was acting as a "reasonable market participant," then it could also expect to see its property rights protected.
U.S. Test
In the U.S., a monopolist may be compelled to share a facility if:
1) Control of the facility
2) Competitors cannot practically or reasonably duplicate it
3) Access is denied
4) Providing access is feasible
Current state of the doctrine
The US Supreme Court has shown skepticism toward the Essential Facility doctrine. Aspen Skiing (1985), still considered the leading U.S. case, was decided on unusual facts (termination of profitable cooperation, harming consumers). In Verizon v. Trinko (2004), the Court refused to extend the doctrine and certified its dormant state.
The CJEU takes a restrictive approach and considers compulsory access as exceptional.
While under EU antitrust rules, market dominance comes with heightened duties under the “special responsibility” doctrine, as to Refusal to Supply/Essential Facilities, both jurisdictions converge on the same policy concern: to protect incentives to invest and avoid forced sharing unless absolutely necessary.
In conclusion, the Essential Facility doctrine is an exceptional remedy, not a routine regulatory tool.
Bundled discounts as potential anti-competitive exclusive dealing arrangements
Regeneron Pharmaceuticals Inc. v. Amgen Inc., the District Court in Delaware dismissed Amgen's MSJ
The ruling highlights that bundled discounts and exclusive rebate contracts, particularly among dominant pharmaceutical companies, will face close scrutiny when they significantly hinder competitors from entering the market.
Bundled discounts are usually seen as pro-competitive, benefitting buyers via lower prices and efficiencies. However, under certain circumstances, they can be exclusionary and violate antitrust laws. Where bundled discounts tie up substantial market share, particularly with customers who would otherwise consider rival suppliers, they can stifle competition and raise antitrust concerns. While courts recognize legitimate efficiency justifications (lower costs, improved logistics), discounts that exceed reasonable cost savings and are structured to maximize exclusion may be challenged under antitrust statutes.
Requirements
- Market Power Requirement (foreclosure concerns arise primarily when the bundling firm holds significant market power in at least one of the products in the bundle);
- Discount-Attribution Test (the test allocates the entire bundle's discount to the competitive product and asks if the resulting price falls below the defendant's incremental cost. If so, and if an equally efficient competitor cannot match, the arrangement may be deemed exclusionary and anticompetitive).
Ruling
On April 10, 2025, the federal court denied Amgen’s motion for summary judgment. The court found that Regeneron presented enough evidence for its antitrust and tortious interference claims to proceed to trial and that key factual disputes required jury consideration
The court determined there were unresolved factual questions regarding:
- Whether Amgen’s bundled discounts restricted Regeneron’s market access due to Regeneron's less diverse product portfolio.
- Whether Amgen’s rebate contracts with pharmacy benefit managers (PBMs) amounted to de facto exclusive dealing that substantially foreclosed Regeneron from the market.
- Whether Amgen’s pricing in certain portions of the market fell below cost under the "price-cost" test and whether recoupment was possible
Comment
The court cited precedent supporting the view that bundled discount practices and rebate arrangements could constitute actionable anticompetitive conduct if they result in market foreclosure (LePage’s Inc. v. 3M; ZF Meritor, LLC v. Eaton Corp.) The Cascade Health Solutions v. PeaceHealth test was referenced for below-cost pricing in bundled arrangements. The standard in Cascade makes the defendant's bundled discounts legal unless the “attributed” price of the competitive product is below the defendants incremental cost and the discounts have the potential to exclude a hypothetical equally efficient producer of the competitive product.
This ruling underscores that bundled discounts and exclusive rebate contracts, especially among dominant pharmaceutical companies, will be closely scrutinized when they may substantially foreclose competitors from the market. The case highlights increased litigation risk for pharmaceutical manufacturers whose PBM contracting practices leverage dominant drugs to secure exclusivity or preferred placement in formularies
Common Ownership and Antitrust
FTC and DOJ to support states' action against BlackRock, State Street, and Vanguard
The FTC and DOJ support the states' action accusing BlackRock, State Street, and Vanguard to harm competition as part of climate-related initiatives. The asset managers collectively own substantial shares in multiple competing coal companies (between 24 and 34 percent of seven of the nine coal companies, with smaller shares in the remaining two).
By acting in concert—through shareholder resolutions, engagement, or other means—they allegedly pressured the management of competing coal companies to obtain their commitment to limit carbon emissions by restricting the production of coal within the United States.
Output reduction can lead to higher prices and reduced consumer welfare, both of which are hallmarks of anticompetitive behavior. Such conduct can be challenged under Section 1 of the Sherman Act (prohibiting agreements that unreasonably restrain trade) and Section 7 of the Clayton Act (addressing mergers or acquisitions that may lessen competition).
Main Arguments:
- The “solely for investment” exemption in Section 7 of the Clayton Act does not provide blanket immunity to asset managers if they use their stock holdings to harm competition
- Control is not required: Minority shareholdings can violate antitrust laws if used to influence competitors’ business decisions in an anticompetitive manner, even without controlling stakes
- The Clayton Act Prohibits the Anticompetitive Use of Minority Interest Acquisitions to Substantially Lessen Competition
- Concerted action under Section 1 of the Sherman Act can be established even without explicit agreements
- Anticompetitive output restraint requires an overall decrease in production: Output can increase but still be restrained below competitive levels, harming competition
Comment: Weaponizing Antitrust or Enforcement?
The lawsuits against asset managers like BlackRock, State Street, and Vanguard—alleging that their climate-related shareholder actions amount to antitrust violations—are widely seen by critics as an attempt to use antitrust law to undermine climate and environmental, social, and governance (ESG) initiatives.
The FTC and DOJ, in their joint statement of interest, emphasize that the case is about the misuse of market power to manipulate energy markets, not about attacking climate goals.
They argue that when institutional investors use their influence across multiple competitors to achieve anticompetitive outcomes—such as restricting output and raising prices—this falls squarely within the scope of antitrust enforcement, regardless of the underlying motivation.
This case applies Section 7 (which focus on prospective harm from mergers) retrospectively to challenge how existing minority shareholdings were used post-acquisition. The agencies argue that post-acquisition conduct can demonstrate that the stock was not held “solely for investment”. The DOJ and FTC cite precedent (e.g., United States v. ITT Continental Baking Co.) affirming that Section 7 applies to stock holdings used anticompetitively, not just their acquisition.
In conclusion, the agencies stop short of condemning common ownership outright and emphasize that conduct—not just structural shareholding—determines antitrust liability. Importantly, the FTC/DOJ’s stance establishes a new enforcement frontier:
using antitrust law to police shareholder conduct.
Minority Shareholdings Collusion Risks
Delivery Hero and Glovo: for the first time the European Commission has sanctioned the anti-competitive use of minority shareholdings
The €329 million European Commission's fine against Delivery Hero and Glovo signals a shift in European competition law, highlighting the significant risks of collusion associated with minority shareholdings in rival companies.
The Commission found that Delivery Hero’s minority, non-controlling stake in Glovo (acquired from 2018 and increased to full control in 2022) enabled and facilitated unlawful coordination between the two companies. This included exchanging sensitive commercial information, dividing markets, and agreeing not to poach each other’s employees—practices that collectively constituted a cartel and violated Article 101 TFEU. This case is both the first time the European Commission has sanctioned the anti-competitive use of a minority shareholding in a rival company, and also the first EU enforcement case concerning labor market collusion (no-poach agreements), further broadening the scope of EU competition law.
The Commission clarified that minority shareholdings become problematic, not only when used to gain inside information, but also to influence decisions in ways that harm competition. The Commission’s action sends a clear warning to companies across sectors—especially those with cross-shareholdings or investments in potential rivals (e.g., Big Tech, banking)—that even non-controlling stakes can trigger antitrust liability if used to coordinate behavior or exchange sensitive information, suggesting increased vigilance regarding minority shareholder arrangements and labor market collusion and that further investigations and enforcement actions may follow.
Main Arguments:
- Minority Shareholding as a Collusion Channel: Delivery Hero’s minority stake was central to the infringement as it enabled Delivery Hero to access Glovo’s commercially sensitive information, influence its decisions, and coordinate strategies—well beyond what is permissible for a passive financial investor
- Mechanisms of Collusion: Formal (board representation, voting rights, and shareholder agreements, including no-poach clauses); Informal (Direct communications, including WhatsApp messages and emails, and the sharing of strategic business information that should have remained confidential)
- Nature and Scope of Collusion: the two companies exchanged sensitive commercial information (e.g., pricing, capacity, costs, market strategies); agreed not to poach each other’s employees and suppressed labor mobility and wages; and agreed to avoid entering each other’s national markets and coordinating entry into new markets
Comment: US/EU emerging convergence on minority shareholdings antitrust liability?
The FTC/DoJ and the European Commission actions establish a new enforcement frontier: using antitrust law to police shareholder conduct. A more nuanced, effects-based analysis of conduct and influence, making the line between legitimate investor oversight and anti-competitive coordination not always obvious.
Both US and EU authorities are thus converging on an approach that scrutinizes the effects and conduct associated with minority shareholdings, rather than condemning the structure itself.