Interpreting Competition in Interlocking Directorates: Why The 1990 Amendments may Exclude The Broader Application of Section 8

Consistent with the Biden administration’s push for vigorous antitrust law enforcement, enforcers have begun to employ Section 8 to target interlocking directorates.  Upon closer review, however, the 1990 amendments to the statute make it ill-suited as a tool to address elements of the administration’s ambitious agenda. In particular, the addition of safe-harbor thresholds, which directed the focus of Section 8 to downstream, revenue-generating competition, preclude the statute’s application to competition to purchase inputs (e.g. labor markets) and non-revenue generating competition (e.g. early innovation competition), all of which have been identified as priorities of enforcement.

By Nandu Machiraju, Darley Maw & Daniel Gao^[1]

I. INTRODUCTION

Rewind the clock five, 10, or even 15 years: The odds of predicting that Section 8 of the Clayton Act, which prohibits interlocking directorates, would be a major beachhead in the U.S. antitrust agencies’ push for renewed vigorous enforcement of the antitrust laws would seem slight. But the present-day Biden administration has shown a penchant for reinvigorating areas of antitrust enforcement that otherwise have been sparsely used, have been used in a more reactionary manner, or, quite frankly, haven’t been used at all. In the aforementioned examples, as well as its recent announcement to initiate a competition rulemaking under its unfair methods of competition authority to ban most non-com