DOJ’s Antitrust Division Continues Its Pursuit of Overlapping Directorates
On March 9, 2023, the Antitrust Division of the U.S. Department of Justice (DOJ) announced that five directors resigned from four separate corporate boards and that another corporation declined to exercise its board appointment rights.
These actions are the result of DOJ’s continuing efforts to enforce section 8 of the Clayton Act, which defines, with limited exceptions, overlapping officers and/or directors of competing corporations as per se antitrust violations. According to DOJ’s related press release, this latest action brings the number of interlocks unwound or prevented to 13 directors from 10 different boards.
Antitrust concerns with overlapping officers and/or directors are significant. At a minimum, these overlaps can facilitate the exchange of competitively sensitive information among competitors that may lead to further antitrust violations, including potential violations of section 1 of the Sherman Act. DOJ’s focus on overlapping directorates and its recent decision to withdraw from the Statements of Antitrust Enforcement Policy in Health Care (based, in part, on what the agency described as too permissive an approach to information sharing) reflect an effort to prevent antitrust violations before they occur.
The fix for a violation of section 8 of the Clayton Act is straightforward—simply eliminate the overlap. However, failing to address such an issue before an enforcement agency comes knocking may result in a costly investigation that could expand beyond an overlap to include joint actions facilitated by the overlap.
