In April, Assistant Attorney General Jonathan Kanter noted in a speech that the DOJ’s enforcement of Section 8 of the Clayton Act (which prohibits interlocking directorates) would not be limited to its merger review process and that the DOJ is “ramping up efforts to identify violations across the broader economy, and we will not hesitate to bring Section 8 cases to break up interlocking directorates.” 

We understand that the DOJ has recently started to send letters to some public companies inquiring about director or management interlocks. In light of this, you may want to consider examining whether any of your existing or proposed directors or management serve on the board or management at any company that could be considered a competitor.

Bear in mind that the DOJ and FTC can only seek injunctive relief for Section 8 violations (i.e., removing the interlock). As part of a Section 8 investigation, however, the agencies are likely to look for evidence of other anticompetitive conduct or collusive behavior in violation of other antitrust laws, including Section 1 of the Sherman Act (which regulates agreements that unreasonably restrain trade), which could subject the companies and individuals involved to additional costly and lengthy investigations and potentially civil or criminal penalties.

Finally, note that private parties may also sue to enforce Section 8 and, unlike the federal agencies, seek treble damages. 

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Photo of Shylah Alfonso Shylah Alfonso

Shylah Alfonso is an innovative problem solver who delivers. Focusing on antitrust counseling and litigation, antitrust clearance for mergers and acquisitions, class action and complex commercial litigation, and intellectual property and fair, reasonable, and nondiscriminatory (FRAND) litigation, she thrives on complex matters and…

Shylah Alfonso is an innovative problem solver who delivers. Focusing on antitrust counseling and litigation, antitrust clearance for mergers and acquisitions, class action and complex commercial litigation, and intellectual property and fair, reasonable, and nondiscriminatory (FRAND) litigation, she thrives on complex matters and regularly leads large cross-office and cross-disciplinary teams.

Shylah has extensive experience working with multinational companies across the market spectrum, including companies looking to enter the U.S. market. Whether involving the Federal Trade Commission (FTC), the U.S. Department of Justice (DOJ), state attorneys general, or private litigants, she has represented manufacturers, retailers, distributors, research and development companies, and patent portfolio holders in a range of industries. These include telecommunications, social networking, big data, gaming, platform markets, semiconductor, computer software, pharmaceuticals, manufacturing, retail, the internet, and aerospace. She has particularly deep experience working with technology companies on issues arising at the intersection of intellectual property and antitrust.

Photo of Christopher Williams Christopher Williams

Chris Williams focuses his practice on antitrust issues related to commercial transactions, including mergers and acquisitions (M&A); joint ventures and other strategic collaborations; licensing of intellectual property; and pricing, supply, and distribution agreements. His experience includes cross-border matters involving regulatory authorities in China…

Chris Williams focuses his practice on antitrust issues related to commercial transactions, including mergers and acquisitions (M&A); joint ventures and other strategic collaborations; licensing of intellectual property; and pricing, supply, and distribution agreements. His experience includes cross-border matters involving regulatory authorities in China, Japan, South Korea, and Europe.

Chris advises on all aspects of merger control, including evaluating regulatory clearance; advising on transaction structure and antitrust risk allocation in M&A agreements; preparing phases of merger notification filings, including under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act); advocating for clients in Second Request investigations by the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC); directing strategy in merger reviews by foreign competition authorities; advising on remedy proposals and negotiations; representing interested third parties and divestiture buyers; and providing guidance on diligence, integration planning, and other pre-closing matters.