The DOJ Investigates Andreessen Horowitz Over Competing Board Seats
The US Justice Department (DOJ) is investigating Andreessen Horowitz over allegations of improper practices related to competiting board seats. The probe centers on whether partners at the venture firm, Ben Horowitz and Martin Casado, have violated antitrust laws by sitting on the boards of competing AI companies, Databricks and Fivetran.
Bloomberg reported the investigation on Monday, citing sources familiar with the matter. The sources indicated that the probe has been ongoing for nearly a year and could potentially end without any formal action from the DOJ.
The Companies and Board Seats
The investigation revolves around two portfolio companies:
- Databricks, where Ben Horowitz serves on the board.
- Fivetran, where Martin Casado, a partner at Andreessen Horowitz, is also on the board. Fivetran acquired dbt Labs in June, a deal that the DOJ reviewed for months before approving it unconditionally.
Legal Context
The relevant legal provision is Section 8 of the Clayton Act (15 U.S.C. 19), which prohibits individuals from serving on the boards of competing corporations if an agreement between them would violate antitrust law. There are exceptions, including for banks and companies below specific capital and profit thresholds.
Previous Cases and Investigations
Bloomberg characterized the current investigation as part of a Biden-era enforcement push under the antitrust division led by Jonathan Kanter. Previously, the DOJ rarely invoked this specific provision. Ari Emanuel, then CEO of Endeavor Group Holdings, left the Live Nation Entertainment board in 2021, and several other directors gave up seats at over a dozen companies in 2022 and 2023.
This case is distinct from previous ones, however, as it involves multiple individual directors from the same firm.