Keys to Unlock the Interlocks: Dealing with Interlocking Directorates

The use of interlocking directorates by American industrial and commercial corporations is widespread. Section 8 of the Clayton Act has been interpreted as prohibiting only interlocks between directly competing firms. There are other kinds of interlocks with substantial anticompetitive effects, however, that have essentially escaped any regulation under the antitrust laws. This article will examine whether the deleterious effects of unregulated interlocks should be a source of concern. It will conclude that these interlocks should not remain unregulated because they are presumptively anticompetitive, produce problems that section 8 was designed to address, and conflict with the basic goals of the antitrust laws. The article will then discuss presently available methods of reaching these interlocks, particularly the Justice Department’s attempts to read section 8 more broadly than it has traditionally been read and the Federal Trade Commission’s efforts to challenge interlocks through section 5 of the Federal Trade Commission Act. In addition, the article will examine proposed legislation that takes a stricter approach toward interlocks.