Nearly half of American households have staked their financial futures in diversified asset pools called mutual funds—to the tune of $22 trillion, according to a recent estimate. In the process of building these funds, mutual fund companies have become the largest shareholders of the world’s most valuable public companies. Although many have touted the social benefits of mutual funds—such as their accessibility to investors and diversified risk—critics including antitrust scholars Einer Elhauge, Herbert Hovenkamp, and Fiona Scott Morton argue that the power of mutual fund companies may be bad for consumers. They have expressed concern over the extent to which the same groups of investors have become the largest shareholders in competing companies, a phenomenon many have dubbed “common ownership.” Through their common ownership of competitors’ shares, mutual funds are not just entitled to vote in the companies’ board…
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