--- title: "The DOJ is testing a 1914 antitrust law against the way venture capital actually works" description: "The Justice Department has spent nearly a year examining whether Andreessen Horowitz breached Section 8 of the Clayton Act by holding board seats at two companies that now compete. Ben Horowitz sits on the board of Databricks, valued at $190 billion; his partner Martin Casado sits on the board of Fivetran. When they took those seats, the two companies were not rivals." category: "Tech" category_url: https://boursel.com/category/tech author: "Kenji Nakamura" published: 2026-08-21T19:57:00.000Z updated: 2026-08-21T19:57:00.000Z canonical: https://boursel.com/article/the-doj-is-testing-a-1914-antitrust-law-against-the-way-venture-capital-actually tags: ["antitrust", "venture-capital", "andreessen-horowitz", "databricks", "regulation"] --- # The DOJ is testing a 1914 antitrust law against the way venture capital actually works The Justice Department has spent nearly a year examining whether Andreessen Horowitz breached Section 8 of the Clayton Act by holding board seats at two companies that now compete. Ben Horowitz sits on the board of Databricks, valued at $190 billion; his partner Martin Casado sits on the board of Fivetran. When they took those seats, the two companies were not rivals. The Justice Department has been examining Andreessen Horowitz for close to a year over the board seats its partners hold, [in a probe first reported by Bloomberg this week](https://techcrunch.com/2026/08/18/dojs-probe-into-andreessen-horowitz-over-board-seats-baffles-vcs/). The provision at issue is Section 8 of the Clayton Act, which is 112 years old and has almost never been aimed at a venture firm. Two seats are in question. Ben Horowitz, who co-founded the firm, sits on the board of Databricks, [valued at $190 billion](https://techcrunch.com/2026/08/18/dojs-probe-into-andreessen-horowitz-over-board-seats-baffles-vcs/). Martin Casado, a partner at the firm, sits on the board of Fivetran, which combined with dbt Labs in June. Andreessen Horowitz did not respond to requests for comment. Databricks and the Justice Department declined to comment. Nothing has been alleged and nothing has been found: this is an investigation. ## What Section 8 forbids The provision bans interlocking directorates. In plain terms, the same person, or the same firm acting through different people, may not sit on the boards of two companies that compete with each other, once the companies are large enough to clear thresholds the Federal Trade Commission updates each year. The logic is old and simple. A director sees a company's pricing, its roadmap and its costs. A director who sees those things at two rivals is a channel through which each learns what the other is doing, whether or not anyone intends it. The law does not require proof that information passed. The overlap itself is the violation, which is what makes Section 8 unusual: most antitrust enforcement asks about effects, and this one asks about a structure. ## Why venture capital is exposed to it by design A venture firm's business model produces this situation almost automatically. A large fund invests in hundreds of companies, and takes a board seat at many of them, because the board seat is how it protects a minority stake and influences the company it has funded. The firm therefore accumulates seats across a sector it has a thesis about, which means seats in companies that are adjacent by construction. Then time passes. Startups pivot, and the ones that succeed expand into neighbouring markets. That is exactly what appears to have happened here: Databricks was known for cloud data storage and has pushed into AI data pipelines with its Lakeflow product, which is [Fivetran's main business](https://techcrunch.com/2026/08/18/dojs-probe-into-andreessen-horowitz-over-board-seats-baffles-vcs/). Neither firm set out to compete with the other. Growth did it to them. So a venture firm can comply with Section 8 on the day it takes every seat and be in breach three years later without doing anything at all. That is what other investors are reacting to, and it is a fair objection to the timing rather than to the law. ## The available remedies, and what they cost The straightforward fix is to give up a seat, and firms do this routinely when a conflict becomes obvious. It is not costless: the seat is the influence, and surrendering it at the more valuable company means accepting less control over the larger asset. The alternative is a wall between the two partners so that neither sees what the other does, which is [the arrangement raised in reporting on the probe](https://techcrunch.com/2026/08/18/dojs-probe-into-andreessen-horowitz-over-board-seats-baffles-vcs/). Banks run these routinely between advisory and trading. Whether one works inside a partnership of a few dozen people who share an investment committee, a thesis and an office is a genuinely harder question. ## Why it matters beyond one firm The number of large multi-stage venture funds that concentrate in a few sectors has grown enormously, and each of them holds seats across companies that AI has pushed towards each other. If Section 8 is enforced on structure rather than conduct, the exposure is industry-wide and mostly unmeasured. The outcome to watch is not a fine. It is whether the Justice Department extracts a remedy that becomes the template, in which case every large firm will have to audit its board seats against a competitive map that keeps moving, and the seat itself becomes a liability to be managed rather than a right to be won. That is a change to how venture capital operates, arrived at through a statute written when the concern was railroads and banks. ## Sources - [DOJ's probe into Andreessen Horowitz over board seats baffles VCs](https://techcrunch.com/2026/08/18/dojs-probe-into-andreessen-horowitz-over-board-seats-baffles-vcs/) - [Why is the DOJ investigating Andreessen Horowitz's board seats?](https://techcrunch.com/video/why-is-the-doj-investigating-andreessen-horowitzs-board-seats/)