BlackRock as an Activist

Alexandros Kazimirov

ABSTRACT

In 2024, a coalition of state attorneys general filed suit against BlackRock, Vanguard, and State Street, alleging that, in an attempt to impose certain climate biases on coal companies, the three asset managers violated antitrust law. With a change of administration, the Federal Trade Commission and the U.S. Department of Justice joined the fray with a joint statement of interest in which the agencies used cross ownership precedent to advance common ownership theory while reaffirming the importance of index investing and corporate governance.

In light of these developments, this Essay makes three observations. First, there is an underlying tension between proponents of systemic stewardship and the predominant form of antitrust analysis, which does not and cannot accommodate the argument that systemic risk mitigation is a procompetitive justification for reducing output and raising prices. Second, the joint statement takes a narrow interpretation of the exception for passive investors under the Clayton Act without condemning index funds. Finally, the states must meet a demanding evidentiary standard, and if they are successful, this could set a precedent that delivers a blow not to BlackRock, but to their own constituents.