Financialization of the food value chain, common ownership and competition law

Abstract

The paper delves into the implications of the financialisation process for competition law enforcement. We consider that the recent debate over common ownership and its impact on competition law and policy integrates one of the possible manifestations of the broader debate competition law should have on the financialisation of the economy. We focus on the food industry and explore the possibility that common ownership may constitute a competition concern, raising issues of unilateral effects, horizontal collusion, vertical exclusion and vertical exploitation. This discussion is particularly important in the context of Global Food Value Chains as many institutional investors are passive investors in the diverse companies that are active at various segments of the Global Food Value Chains. In view of the possible negative welfare effects of common ownership on competition and its prevalence in the food sector, it is contended that competition authorities need to develop adequate legal tools to deal with this issue and rely on economics but also other sources of wisdom (e.g. advanced social network analysis) that may enable a better mapping of the complexity of competitive interactions in this sector and be more adequate in the context of a complex economy. The paper sets the broader theoretical framework and proceeds to an empirical investigation of common ownership in the global food value chain using the tool of advanced social network analysis.