Who is a Competitor Under Section 8?

The Department of Justice Antitrust Division has recently been investigating public companies for possible violations of Section 8 of the Clayton Act, 15 U.S.C. § 19, based on information listed in the Risk Factors section of their annual and quarterly SEC filings. Section 8 prohibits “interlocking directorates,” situations in which an individual or entity serves as a director or officer of two corporations that are “competitors.” So far, the Departments efforts have appeared to focus on interlocks in which one company named the other as a competitor in a public filing. In this article, we explain that the “competitors” listed in a public company’s SEC filings are not necessarily competitors within the meaning of Section 8.

By Michelle Yost Hale & Jake Philipoom^[1]

The Department of Justice Antitrust Division (“DOJ”) has recently been investigating public companies for possible violations of Section 8 of the Clayton Act, 15 U.S.C. § 19, based on information listed in the Risk Factors section of their annual and quarterly SEC filings. Section 8 prohibits “interlocking directorates,” situations in which an individual or entity serves as a director or officer of two corporations that are “competitors.” As Deputy Assistant Attorney General Andrew Forman recently stated, “the Division is committed to taking aggressive action” against board interlocks.^[2]

So far, DOJ’s efforts appear to focus on interlocks in which one company named