{"id":4807,"date":"2020-08-25T14:05:47","date_gmt":"2020-08-25T18:05:47","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/hblr\/?page_id=4807"},"modified":"2025-02-18T17:19:01","modified_gmt":"2025-02-18T22:19:01","slug":"volume-10-issue-2","status":"publish","type":"page","link":"https:\/\/journals.law.harvard.edu\/hblr\/volume-10-issue-2\/","title":{"rendered":"Volume 10, Issue 2"},"content":{"rendered":"
CORPORATE LAW & GOVERNANCE<\/h5>\n

HOW HORIZONTAL SHAREHOLDING HARMS OUR ECONOMY\u2014AND WHY ANTITRUST LAW CAN FIX IT<\/a><\/h3>\n
Einer Elhauge<\/strong><\/em><\/h6>\n

Empirical evidence that horizontal shareholding has created anticompetitive effects in airline and banking markets have produced calls for antitrust enforcement. In response, others have critiqued the airline and banking studies and argued that antitrust law cannot tackle any anticompetitive effects from horizontal shareholding. I show that new economic proofs and empirical evidence, ranging far beyond the airline and banking studies, show that horizontal shareholding in concentrated markets often has anticompetitive effects. I also provide new analysis demonstrating that critiques of the airline and banking market level studies either conflict with the evidence or, when taken into account, increase the estimated adverse price effects from horizontal shareholding. Finally, I provide new legal theories for tackling the problem of horizontal shareholding. I show that when horizontal shareholding has anticompetitive effects, it is illegal not only under Clayton Act \u00a77, but also under Sherman Act \u00a71. In fact, the historic trusts that were the core target of antitrust law were horizontal shareholders. I further show that anticompetitive horizontal shareholding also constitutes an illegal agreement or concerted practice under EU Treaty Article 101, as well as an abuse of collective dominance under Article 102. I conclude by showing that horizontal shareholding not only lessens the market concentration that traditional merger law can tolerate, but also means that what otherwise seem like non-horizontal mergers should often be treated as horizontal. Those implications for traditional merger analysis become even stronger if we fail to tackle horizontal shareholding directly.<\/p>\n

\n
CORPORATE LAW & GOVERNANCE<\/h5>\n

COMPETING FOR VOTES<\/a><\/h3>\n
Kobi Kastiel & Yaron<\/strong><\/em> Nili<\/strong><\/em><\/h6>\n

Shareholder voting matters. It can directly shape a corporation\u2019s governance, operational and social policies. But voting by shareholders serves another important function\u2014it produces a marketplace for votes where management and dissidents compete for the votes of the shareholder base. The competition over shareholder votes generates ex ante incentives for management to perform better, to disclose information to shareholders in advance, and to engage with large institutional investors.<\/p>\n

\n
TECHNOLOGY & INNOVATION<\/h5>\n

ARTIFICIAL FINANCIAL INTELLIGENCE<\/a><\/h3>\n
William Magnuson\u00a0<\/strong><\/em><\/h6>\n

Recent advances in the field of artificial intelligence have revived long- standing debates about the interaction between humans and technology. These debates have tended to center around the ability of computers to exceed the capacities and understandings of human decisionmakers, and the resulting effects on the future of labor, inequality, and society more generally. These questions have found particular resonance in finance, where computers already play a dominant role. High-frequency traders, quantitative (or \u201cquant\u201d) hedge funds, and robo-advisors all represent, to a greater or lesser degree, real-world instantiations of the impact that artificial intelligence is having on the field. This Article, however, takes a somewhat contrarian position. It argues that the primary danger of artificial intelligence in finance is not so much that it will surpass human intelligence, but rather that it will exacerbate human error. It will do so in three ways. First, because current artificial intelligence techniques rely heavily on identifying patterns in historical data, use of these techniques will tend to lead to results that perpetuate the status quo (a status quo that exhibits all the features and failings of the external market). Second, because some of the most \u201caccurate\u201d artificial intelligence strategies are the least transparent or explain- able ones, decision makers may well give more weight to the results of these algorithms than they are due. Finally, because much of the financial industry depends not just on predicting what will happen in the world, but also on predicting what other people will predict will happen in the world, it is likely that small errors in applying artificial intelligence (either in data, programming, or execution) will have outsized effects on markets. This is not to say that artificial intelligence has no place in the financial industry, or even that it is bad for the industry. It clearly is here to stay, and, what is more, has much to offer in terms of efficiency, speed, and cost. But as governments and regulators begin to take stock of the technology, it is worthwhile to consider artificial intelligence\u2019s real- world limitations.<\/p>\n

\n
CORPORATE LAW & GOVERNANCE<\/h5>\n

FEDERAL FORUM PROVISIONS AND THE INTERNAL AFFAIRS DOCTRINE<\/a><\/h3>\n
Dhruv Aggarwal, Albert H. Choi, & Ofer Eldar\u00a0<\/strong><\/em><\/h6>\n

A key question at the intersection of state and federal law is whether corporations can use their charters or bylaws to restrict securities litigation to federal court. In December 2018, the Delaware Chancery Court answered this question in the negative in the landmark decision Sciabacucchi v. Salzberg. The court invalidated \u201cfederal forum provisions\u201d (\u201cFFPs\u201d) that allow companies to select federal district courts as the exclusive venue for claims brought under the Securities Act of 1933 (\u201c1933 Act\u201d). The decision held that the internal affairs doc- trine, which is the bedrock of U.S. corporate law, does not permit charter and bylaw provisions that restrict rights under federal law. In March 2020, the Delaware Supreme Court overturned the Chancery\u2019s decision in Salzberg v. Sciabacucchi, holding that in addition to \u201cinternal\u201d affairs, charters and bylaws can regulate \u201cintra-corporate\u201d affairs, including choosing the forum for Securities Act claims.<\/p>\n","protected":false},"excerpt":{"rendered":"

CORPORATE LAW & GOVERNANCE HOW HORIZONTAL SHAREHOLDING HARMS OUR ECONOMY\u2014AND WHY ANTITRUST LAW CAN FIX IT Einer Elhauge Empirical evidence […]<\/p>\n","protected":false},"author":109,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"class_list":["post-4807","page","type-page","status-publish","hentry"],"jetpack_shortlink":"https:\/\/wp.me\/PgKEUK-1fx","jetpack-related-posts":[{"id":5258,"url":"https:\/\/journals.law.harvard.edu\/hblr\/corporate-law-governance\/","url_meta":{"origin":4807,"position":0},"title":"Corporate Law & Governance","author":"wgu","date":"February 15, 2025","format":false,"excerpt":"VOLUME 15 \u2022 COLUMNS THE DUAL CLASS DILEMMA AND THE SUNSET-CLAUSE SOLUTION\u00a0 Adrian Brown The desirability of dual-class stock has been a source of substantial controversy. Some scholars, commentators, and industry participants are wholly in favor of such arrangements. Others are wholly opposed. While neither of these diametrically opposed views\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4857,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-11-issue-1\/","url_meta":{"origin":4807,"position":1},"title":"Volume 11, Issue 1","author":"wgu","date":"May 16, 2021","format":false,"excerpt":"[vc_row][vc_column][vc_column_text] CORPORATE LAW & GOVERNANCE AN EFFICIENCY ANALYSIS OF DEFENSIVE TACTICS Ronald J. Gilson & Alan Schwartz For thirty-five years, courts and scholars have been divided over the effects of defensive tactics in the market for corporate control. 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Hedge, and Francesca Pisano Antitrust merger enforcement has become increasingly aggressive in recent years with the Federal Trade Commission and Antitrust Division of the Department of Justice demonstrating that they are ready\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5253,"url":"https:\/\/journals.law.harvard.edu\/hblr\/legal-regulatory-compliance\/","url_meta":{"origin":4807,"position":3},"title":"Legal & Regulatory Compliance","author":"wgu","date":"February 15, 2025","format":false,"excerpt":"VOLUME 15 \u2022 COLUMNS BOEING: THE MULTITUDE OF ITS TROUBLES Erica (Xinhui) Chen Boeing, the aviation giant corporation, has been facing a multitude of troubles in recent years. Two accidents of Boeing 737 Max resulted in the deaths of 346 people and revealed the flawed engineering safety control of Boeing.\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5489,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-16-issue-1\/","url_meta":{"origin":4807,"position":4},"title":"Volume 16, Issue 1","author":"Olivia Schwartz","date":"May 8, 2026","format":false,"excerpt":"COMPARATIVE CORPORATE LAW DECONSTRUCTING THE \"ANGLO-AMERICAN\" CORPORATE MODEL Brian R. Cheffins and Bobby V. Reddy While approaches to corporate law and corporate governance vary globally, the U.S. and the U.K. are often grouped together under the \u201cAnglo-American\u201d corporate model. In this article, we deconstruct that model through the first wide-ranging\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4236,"url":"https:\/\/journals.law.harvard.edu\/hblr\/hblr-online-volume-1\/","url_meta":{"origin":4807,"position":5},"title":"Volume 1 (2010\u20132011)","author":"ehansen","date":"July 31, 2016","format":false,"excerpt":"BUSINESS & CORPORATIONS LLCS AND CORPORATIONS: A FORK IN THE ROAD IN DELAWARE? Joshua P. Fershee The limited liability company (LLC) has evolved from a little used entity option to become the leading business entity of choice. The primary impetus for this change was an Internal Revenue Service (IRS) determination\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages\/4807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/users\/109"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/comments?post=4807"}],"version-history":[{"count":0,"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/pages\/4807\/revisions"}],"wp:attachment":[{"href":"https:\/\/journals.law.harvard.edu\/hblr\/wp-json\/wp\/v2\/media?parent=4807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}