Why has the U.S. Department of Justice launched a nearly year-long Section 8 Clayton Act investigation into Andreessen Horowitz’s board seats at Databricks and Fivetran—where co-founder Ben Horowitz and partner Martin Casado respectively serve despite the companies becoming compe

The DOJ appears to be testing whether a16z’s two board representatives amount to an unlawful “interlock” between competitors—not alleging that a16z merely made two investments. The reported inquiry is unresolved, but it could determine how far Section 8 reaches when separate partners at one VC firm sit on boards of companies that later begin to compete. 1

• Why the DOJ is investigating: Ben Horowitz reportedly sits on Databricks’ board and Martin Casado on Fivetran’s. Section 8 bars the same person—or potentially an agent/deputy of the same firm—from serving as a director or officer of competing companies, subject to limited statutory exceptions. DOJ calls such interlocks a per se violation, meaning it need not first prove actual price-fixing, information sharing, or market harm. 1 7 9

• Why Databricks and Fivetran may now compete: Fivetran’s core business is managed data ingestion: connectors that pull data from enterprise applications and databases into a customer’s data platform. Databricks’ Lakeflow platform now includes Lakeflow Connect, which provides ingestion from more than 100 enterprise sources, putting it directly into the connector/data-pipeline layer in which Fivetran operates. 6

• Why VCs are surprised: A multi-company portfolio and distinct a16z partners holding different board seats are normal VC practice, especially because portfolio companies often evolve into adjacent markets after the investment. The surprise is the possible application of the century-old interlocking-directorates rule to the VC firm itself through separate partners—an expansive “deputization” theory rather than the classic case of one literal individual holding two seats. The reported probe has lasted nearly a year. 1 12

• Why a board seat is different from owning stakes in two rivals: Passive investment does not inherently provide governance authority or routine access to each company’s competitively sensitive plans. A director typically receives detailed nonpublic information—product roadmaps, pricing, prospective customers, financing plans, and strategic deliberations—and owes fiduciary duties to the company. That makes the conflict more acute and provides the mechanism Section 8 is designed to prevent. Section 8 specifically targets concurrent director/officer roles, not ordinary minority holdings. 7 9

• Potential remedies:

  • The clearest statutory fix is for Horowitz or Casado to resign from one board, or for a16z to relinquish the associated nomination/right-to-appoint power. DOJ has previously resolved Section 8 concerns through director resignations and relinquishment of appointment rights. 8 10
  • A genuine information barrier—separate deal teams, no sharing of board materials or discussions, documented recusals, and restricted access—could reduce practical confidential-information risk.
  • But a “Chinese wall” may not, by itself, cure a Section 8 violation if the DOJ concludes both partners are acting as a16z agents on the boards. The statutory issue is the interlock itself, not merely whether information demonstrably crossed the wall. 7 9

• Potential precedent: A DOJ enforcement action or settlement on this theory could force VC firms to continuously map competition across portfolios, structure board rights more narrowly, appoint independent directors rather than firm partners, and surrender seats when portfolio companies converge. It could also weaken the commercial value of a VC’s board commitment: founders may be less able to treat an investor’s board seat as a durable source of operating help if the investor might have to exit when another portfolio company becomes a competitor. This is a prospective implication, not an established outcome of the still-reported investigation. 1 7