On May 22, 2025, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) jointly filed a Statement of Interest in a pending lawsuit in Texas federal court, marking the first time federal antitrust authorities have formally raised concerns about the implications of common ownership—where institutional investors hold stakes in competing firms—on market competition. The brief outlines the government’s position that such ownership structures may, under certain circumstances, give rise to antitrust liability if they are used to influence competing firms in a manner that suppresses competition.
Background: Texas-Led Lawsuit Against BlackRock, Vanguard, and State Street
The DOJ/FTC brief arises from a lawsuit filed in November 2024 by the Texas Attorney General, joined by 12 other Republican state attorneys general,[1] against three of the world’s largest asset managers: BlackRock, Vanguard Group, and State Street. The complaint alleges that the firms conspired with major coal producers to suppress coal production in the United States, thereby increasing energy prices. The states contend that the defendants leveraged their significant shareholdings in multiple coal companies to advance coordinated environmental, social, and governance (ESG) goals—particularly net-zero carbon initiatives—that allegedly resulted in anticompetitive reductions in domestic coal output.
The three asset managers collectively held, at various times, up to 34 percent of shares in seven of the nine largest U.S. coal producers.
The DOJ and FTC’s Position
In their joint Statement of Interest, the DOJ and FTC expressed concern over conduct that may reduce competition in energy markets and potentially violate Section 1 of the Sherman Act. While emphasizing that passive index investing and routine shareholder advocacy remain lawful, the agencies stated that “if asset managers use their substantial shareholdings in competing companies to influence the management of those companies to reduce the output of U.S. coal production below competitive levels, such conduct may violate the antitrust laws.”
The agencies further explained their rationale:
The Agencies have interests here in ensuring the correct application of the antitrust laws, including in America’s energy markets. Doing so protects Americans from anticompetitive behavior that reduces the production of domestic energy, raises energy prices for consumers and businesses, and undermines America’s energy dominance.
This filing does not establish liability, but it signals the agencies’ evolving enforcement posture and a willingness to examine how investment structures—particularly common ownership across competing firms—may be used to indirectly influence market outcomes.
Response from the Defendants
BlackRock, Vanguard, and State Street have all vigorously contested the lawsuit. In a joint motion to dismiss filed earlier this year, the firms argued that their investment practices are passive in nature and do not constitute unlawful concerted action under the antitrust laws. They emphasized that any ESG-related shareholder engagement—such as voting proxies or engaging with management—was lawful and non-collusive.
In response to the DOJ/FTC brief, BlackRock stated:
This case attempts to rewrite antitrust law based on the unfounded premise that shareholders conspired with coal companies to suppress production. Forcing divestment will undermine capital access for energy producers and result in higher costs for consumers.
Vanguard asserted that the complaint “distorts the law in ways that could harm retail investors,” while State Street reiterated that the claims are without merit and are not strengthened by the federal government’s involvement.
Implications for Institutional Investors
This development reflects growing regulatory scrutiny of institutional investors’ influence in concentrated industries. While the DOJ and FTC have reiterated that passive investment remains permissible, the agencies appear poised to challenge instances where institutional ownership is alleged to have influenced the conduct of competing firms in ways that materially reduce competition.
Next Steps
The lawsuit remains pending in Texas federal court, with a decision on the defendants’ motion to dismiss expected later this year. Regardless of the outcome, the DOJ and FTC’s Statement of Interest signals that the federal government is prepared to take a more active role in examining the antitrust implications of institutional common ownership and ESG engagement practices.
[1] The states of Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming have signed on to the lawsuit with Texas and have included various state violations of antitrust laws and deceptive marketing practices among their claims.