Why is the DOJ investigating Andreessen Horowitz’s board seats?

The US Department of Justice is reportedly examining whether Andreessen Horowitz’s board arrangements breach competition law. The inquiry centres on two portfolio companies that have come to overlap competitively: Databricks, where a16z co-founder Ben Horowitz is a director, and Fivetran, whose board includes a16z partner Martin Casado. According to reports, the companies were not necessarily direct rivals when the venture firm invested, but Databricks’ expansion into data pipelines and application connectors has brought it closer to Fivetran’s core business. The DOJ, Databricks and a16z have not publicly confirmed substantive details of the reported investigation, and no finding of wrongdoing has been announced.

The potential legal issue is Section 8 of the Clayton Act, the US antitrust provision on “interlocking directorates”. It generally bars the same person from serving as a director or officer of two competing corporations, subject to financial thresholds and limited exceptions. The situation is less straightforward because different a16z partners, rather than one individual, hold the two seats; venture investors also commonly use information barriers to limit sharing of confidential portfolio-company information. The case nevertheless puts a common venture-capital practice under scrutiny: portfolio companies can evolve into competitors after investment, while board directors retain access to sensitive strategy and commercial information. Any enforcement action could encourage venture firms to review or relinquish some board roles, though the investigation could also end without action.