The U.S. Justice Department has opened a probe into Andreessen Horowitz over partners holding board seats at competing startups, testing whether a 112-year-old antitrust law now applies to venture capital.
The nearly year-long investigation centers on Databricks, valued at $190B, where co-founder Ben Horowitz sits on the board, and Fivetran, which merged with dbt Labs in June, where partner Martin Casado holds a seat. The two have become rivals as Databricks expanded into AI data pipelines with Lakeflow.
The probe invokes Section 8 of the Clayton Act, which bars individuals from serving on the boards of competing companies. Regulators have rarely aimed it at venture firms, and several investors told TechCrunch they were surprised by the news.
Some argue a Chinese wall between the two partners could resolve the conflict. But the case could reshape boardroom norms: if a top firm is forced to surrender a seat, founders may place less value on board commitments from marquee investors.
With hundreds of portfolio companies, most large funds inevitably back startups that later compete. The industry is watching whether the DOJ treats board seats as the line that cannot be crossed, even when different partners hold them.
Databricks and the DOJ declined comment, and Andreessen Horowitz did not respond to requests.
