Understanding Section 8 of the Clayton Antitrust Act
Section 8 of the Clayton Act prohibits "interlocking directorates"—the simultaneous service of a person as a director or officer of two competing corporations—subject to specific financial and competitive safe harbor thresholds. The statute is designed to prevent anti-competitive coordination or communication between competitors at the board or executive leadership level.
How FTC Threshold Updates Work (2025 - 2026)
The Federal Trade Commission (FTC) is statutorily required to adjust the jurisdictional thresholds of Section 8 annually based on changes in the gross national product. In January 2026, the FTC revised the capital and surplus threshold under Section 8(a)(1) to $54,402,000, up from $51,380,000 in 2025. Similarly, the competitive sales absolute exception limit under Section 8(a)(2)(A) was adjusted to $5,440,200, up from $5,138,000 in 2025.
The Three Competitive Sales Safe Harbors
Even if both corporations exceed the primary asset size threshold, the interlock remains entirely lawful if any of the following three competitive exceptions are met:
- The Absolute De Minimis Exception: The competitive sales of either corporation are less than the statutory dollar limit ($5,440,200 for 2026).
- The 2% Individual Exception: The competitive sales of either corporation are less than 2.0% of its total consolidated revenues.
- The 4% Mutual Exception: The competitive sales of each corporation represent less than 4.0% of their respective total consolidated revenues.
The 1-Year Statutory Grace Period under Section 8(b)
Recognizing that corporate sales and asset values change dynamically, the statute includes a safety valve under Section 8(b). If an interlock was previously compliant but becomes non-compliant due to an increase in corporate assets or competitive sales, the individual is allowed a period of one year (12 months) from the date of the change to cure the interlock, typically by resigning from one of the positions or by selling/divesting the competing product lines.
Active Enforcement & Modern Governance Practices
In 2026, Section 8 is a primary focus of federal antitrust regulators, with the FTC and DOJ aggressively auditing interlocking boards within private equity (PE), healthcare, tech, and retail sectors. Modern corporate compliance dictates that boards execute regular D&O (Director and Officer) questionnaires and annual competitive overlap analysis to ensure no prohibited interlocks are active. Furthermore, antitrust authorities increasingly evaluate Section 8 principles for non-corporate entities (such as LLCs and partnerships), making thorough cross-portfolio audits vital.