The Federal Trade Commission announced Tuesday that it has approved revised jurisdictional thresholds for Section 8 of the Clayton Act, updating the financial limits that determine when certain interlocking memberships on corporate boards of directors are prohibited.
For 2026, the FTC set the threshold under Section 8(a)(1) at $54,402,000 and the threshold under Section 8(a)(2)(A) at $5,440,200. These thresholds represent the annual adjustment of dollar amounts that trigger antitrust scrutiny of shared board memberships between competing companies.
The commission approved the Federal Register notice announcing the threshold revisions in a unanimous 2-0 vote, reflecting bipartisan support for the routine administrative update.
Section 8 of the Clayton Act serves as a key antitrust provision designed to prevent conflicts of interest and anticompetitive coordination between rival companies. The statute prohibits individuals from serving simultaneously on the boards of directors of competing corporations when certain financial thresholds are met.
Under Section 8(a)(1), the prohibition applies when both corporations have capital, surplus, and undivided profits aggregating more than the specified threshold amount. The newly announced $54.4 million threshold represents the baseline above which interlocking directorates between horizontal competitors become presumptively problematic under federal antitrust law.
Section 8(a)(2)(A) establishes a separate threshold for competitive relationships between corporations. The $5.4 million threshold applies to situations involving companies that compete in the sale of products or services, providing a lower bar for triggering the interlocking directorate prohibition in cases where direct competition exists.
The interlocking directorate provisions aim to prevent scenarios where shared board members could facilitate coordination on pricing, output, or other competitive decisions between rival firms. By prohibiting such arrangements above certain size thresholds, the Clayton Act seeks to maintain competitive independence between companies that compete in the marketplace.
These threshold adjustments occur annually to account for inflation and changes in the economy. The Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires the FTC and Department of Justice to adjust various Clayton Act thresholds each year based on changes in gross national product.
The updated thresholds will become effective once the FTC publishes the notice in the Federal Register. Companies and their board members will need to evaluate their current directorship arrangements against the new thresholds to ensure compliance with federal antitrust law.
For corporations and executives, the threshold updates require ongoing attention to board composition and potential conflicts. Companies that previously fell below the jurisdictional thresholds may now find themselves subject to Section 8 prohibitions, necessitating changes to board membership or corporate structure.
The FTC maintains a complete listing of current thresholds on its website, which the agency indicated will be updated closer to the effective date. This resource provides guidance for companies seeking to understand their obligations under various Clayton Act provisions.
Interlocking directorate enforcement has gained renewed attention in recent years as antitrust agencies have taken a more aggressive approach to competition policy. The prohibitions serve as a prophylactic measure, preventing potentially anticompetitive coordination before it occurs rather than requiring proof of actual harm to competition.
Violations of Section 8 can result in significant consequences, including forced resignation from board positions and potential civil penalties. The provision operates as a bright-line rule, making compliance relatively straightforward once the relevant thresholds and competitive relationships are identified.
The threshold increases reflect broader economic growth and inflation since the previous adjustment. As corporate revenues and market capitalizations have expanded, the FTC has correspondingly raised the dollar amounts that trigger various antitrust provisions to maintain their intended scope and effectiveness.
Legal practitioners and corporate counsel will need to advise clients on the implications of the new thresholds, particularly for companies experiencing growth that might push them above the revised limits. The annual nature of these adjustments requires ongoing monitoring and compliance assessment.
The FTC's announcement represents routine administrative action required by federal law, but the specific threshold amounts can have practical implications for corporate governance and board recruitment strategies. Companies operating near the threshold levels must carefully consider the antitrust implications of proposed board appointments.
As the thresholds await publication in the Federal Register, affected companies should begin evaluating their current board compositions and preparing for any necessary adjustments to ensure compliance with the updated Clayton Act requirements. The unanimous commission vote suggests broad support for maintaining robust enforcement of interlocking directorate prohibitions as an essential component of federal antitrust policy.