EXAMINATION OF HORIZONTAL SHAREHOLDING IN THE FRAMEWORK OF COMPETITION LAW
In today's economic markets, it is observed that investors use a variety of strategies as per the developing and changing market conditions. Investors who do not want to take all the risks by holding their shares in a single company but still aim to maximize their profits, try new strategies by diversifying their assets to reduce risk and gain market power. This article has been prepared to analyze the concept of "horizontal shareholding", which is especially noticed in the USA but also found in our country, within the framework of competition law.
The term of "horizontal shareholding" which is defined in the literature as "an investor's minority shareholding that does not control many competing enterprises at the same time", was first discussed in the USA and then attracted attention in the European Union (EU). However, the fact that the issue is based on a recent history has resulted in the lack of consensus on it yet.
In fact, horizontal shareholding may be summarized as investors holding shares in different companies in the same market. Within the framework of current competition law regulations, these structures are not evaluated as mergers and acquisitions or cartels. However, the fact that investors buy minority shares in rival companies threatens competition due to the joint control it provides in the market. Since investors with minority shares in more than one competitor can affect the management decision of the companies, the competition in the market will be softened and the profit to be obtained will be maximized.
To have a better understanding by an example; consider two rival undertakings operating in the market as X and Y. If X unilaterally increases its prices, some of its customers may go to Y, and this may create a restriction on X's decision to increase the price. However, this result may change if X has a minority stake in Y. Because although X may lose some of the demand as a result of the price increase, Y will be able to increase its total net profit since it is a shareholder in Y's profit with its minority shareholding. This situation has a restrictive effect on competition.
When the shareholding structures of publicly traded companies in Turkey are examined, a concentrated structure with family companies is encountered rather than a scattered shareholding structure subject to horizontal shareholding. In addition, portfolio diversity and size of institutional investors in Turkey is quite low compared to countries that currently have a horizontal shareholding market structure. Since the combination of all these leads the investors to not be effective in the strategies of the undertakings in their portfolios, it is possible to state that the competitive concerns that horizontal shareholding may create in terms of Turkish competition law have not yet arisen.
Although horizontal shareholding is a formation that has the power to affect competition, it has become very controversial recently, especially in the USA. Although the concept of horizontal shareholding does not pose a problem in terms of Turkish competition law due to the shareholding structures of companies in our country, in the future, if an investor has minority shareholding in many competing enterprises at the same time and uses it to affect competition, in the situations such as company shareholding structures and portfolio diversification. It is foreseen in such a situation, it will be seriously discussed in our country and legislative studies will be carried out before the competition authorities.