Definition
Inter-locking directorates refer tosituations in which the same individual sits on the boards of directors of competitors (‘direct’ inter-locking directorates) or in which an investor has the right to appoint board nominees at competitors (‘indirect’ inter-locking directorates).
Commentary
Theories of Harm
Inter-locking directorates raise concerns under competition law as they may reduce the intensity of competition in the market and facilitate coordinated conduct between competitors.
The Competition Commission of India (CCI) has stated that ‘common ownership’ gives rise to two theories of harm:
unilateral effects where common ownership may incentivize unilateral price increases (or reductions in quality) that may be unprofitable for a firm, but beneficial for its investors if they also hold shares in its competitor(s); and
coordinated effects which may create additional incentives to investors to facilitate collusion and earn collusive profits.
India
The Competition Act, 2002 (Competition Act) does not explicitly prohibit or regulate inter-locking directorates. Section 165 of the Companies Act, 2013, in fact, allows an individual to be appointed as a director in up to 20 companies at the same time.1
The CCI nonetheless raises concerns with common ownership and inter-locking directorates during its review of combinations in markets with significant concentration. Transacting parties (both strategic and financial investors) have committed to either waive their board nomination rights or not appoint common directors in the competitors.
In ChrysCapital/Intas , ChrysCapital sought the CCI’s approval for its proposed acquisition of a minority stake in Intas Pharmaceuticals (Intas), which would also give ChrysCapital the ability to appoint a representative on its board.2 Given ChrysCapital's existing investments in Intas' competitor, Mankind, it committed to inter alia remove its existing director from the board of Mankind and not to exercise its right to nominate a director on the board of Mankind while it had the right to nominate a director on the board of Intas. Similar commitments have been offered in other transactions, including Umang / Aditya Marketing3 and TRIL / Valkyrie / Solis4 . Such strict commitments appear to be necessary in cases where the market shares of the parties are high and/or there is an acquisition of control.
In Bharat Forge / AAM India5 , the CCI evaluated Bharat Forge’s acquisition of 100% shareholding in a company involved in the manufacture and sale of axles for commercial vehicles. The CCI noted that Bharat Forge’s promoters also held a controlling stake in two joint ventures (Affiliate JVs) that compete with the target. Bharat Forge committed that there would be no common directors between the target and the Affiliate JVs. It also undertook toappoint only non-executive directors in one of the Affiliate JVs, and its nominee directors would recuse themselves from any decisions involving competition with the target. Parties have offered similar commitments in Northern / Fortis (C-2018/09/601)6 and Ruby Asia Holdings II Pte. Ltd./ Singtel Interactive Pte. Ltd./ STT GDC Pte. Ltd. (C-2024/ 07/ 1168).7 Such commitments appear to be acceptable in instances where there is some degree of separation between the competing parties.
Comparative Analysis
In the United States, Section 8 of the Clayton Act expressly prohibits inter-locking directorates subject to a few limited exemptions. The purpose of this prohibition on inter-locking directorates is “..[t]o nip in the bud incipient antitrust violations by removing the opportunity or temptation for such violations.”8 The Federal Trade Commission routinely updates the jurisdictional thresholds for the applicability of this prohibition on the acquiring enterprises.9 Historically, the enforcement of Section 8 of the Clayton Act was largely focused on the context of merger reviews. However, recently, the Department of Justice has actively pursued potential Section 8 violations ex post facto, outside the purview of merger review, with several directors being compelled to resign across various competing companies.10
The European Union competition framework has no specific provision against interlocks but assesses them on a case-by-case basis.11 The amended merger notification forms introduced in September 2023 now require notifying parties to disclose any inter-locking directorates in competing companies; if so, the regulator may decline to review such transactions under its fast-track procedure.
Other jurisdictions, such as Japan, South Korea, Canada, and South Africa, also consider the issue of inter-locking directorates as a part of the merger review process. Interestingly, in South Africa, an anti-competitive agreement would be presumed between all competitors that have inter-locking directorates or common ownerships, if any combination of those competitors engages in ‘a restrictive horizontal practice’.12
Companies Act 2013, s 165.↩︎
Canary Investments Ltd and Link Investment Trust II/Intas Pharmaceuticals Ltd (Competition Commission of India, Combination Registration No C-2020/04/741, 30 April 2020) https://cci.gov.in/images/caseorders/en/1652331424.pdf accessed 15 June 2026.↩︎
Umang Commercial Company Pvt Ltd/Aditya Marketing and Manufacturing Pvt Ltd (Competition Commission of India, Combination Registration No C-2022/07/952, 30 August 2022) https://cci.gov.in/images/caseorders/en/order1666171966.pdf accessed 15 June 2026.↩︎
TRIL Urban Transport Pvt Ltd, Valkyrie Investment Pte Ltd and Solis Capital (Singapore) Pte Ltd/GMR Airports Ltd (Competition Commission of India, Combination Registration No C-2019/07/676, 1 October 2019) https://www.cci.gov.in/images/caseorders/en/1652510493.pdf accessed 15 June 2026.↩︎
Bharat Forge Ltd/AAM India Manufacturing Corporation Pvt Ltd (Competition Commission of India, Combination Registration No C-2024/10/1197, 22 April 2025) https://www.cci.gov.in/public/images/caseorders/en/order1753424016.pdf accessed 15 June 2026.↩︎
Northern TK Venture Pte Ltd/Fortis Healthcare Ltd and Fortis Malar Hospitals Ltd (Competition Commission of India, Combination Registration No C-2018/09/601, 29 October 2018) https://www.cci.gov.in/images/caseorders/en/1652334970.pdf accessed 15 June 2026.↩︎
Ruby Asia Holdings II Pte Ltd and Singtel Interactive Pte Ltd/STT GDC Pte Ltd (Competition Commission of India, Combination Registration No C-2024/07/1168, 5 November 2024) https://www.cci.gov.in/images/caseorders/en/order1736487208.pdf accessed 15 June 2026.↩︎
TRW, Inc. v. Federal Trade Commission 647 F.2d 942 (9th Cir. 1981).↩︎
Federal Trade Commission, ‘Revised Jurisdictional Thresholds for Section 8 of the Clayton Act’ <https://www.ftc.gov/legal-library/browse/federal-register-notices/revised-jurisdictional-thresholds-section-8-clayton-act-23> accessed 15 May 2026.↩︎
US Department of Justice, ‘Directors Resign from the Boards of Five Companies in Response to Justice Department Concerns about Potentially Illegal Interlocking Directorates’ https://www.justice.gov/archives/opa/pr/directors-resign-boards-five-companies-response-justice-department-concerns-about-potentially accessed 18 May 2026; US Department of Justice, ‘Justice Department’s Ongoing Section 8 Enforcement Prevents More Potentially Illegal Interlocking Directorates’ https://www.justice.gov/archives/opa/pr/justice-department-s-ongoing-section-8-enforcement-prevents-more-potentially-illegal accessed 18 May 2026; US Department of Justice, ‘Tencent Removes Two Directors from Epic Games and Relinquishes Its Right to Unilaterally Appoint Directors’ https://www.justice.gov/archives/opa/pr/tencent-removes-two-directors-epic-games-and-relinquishes-its-right-unilaterally-appoint accessed 18 May 2026; US Department of Justice, ‘Two Warner Bros Discovery Directors Resign after Justice Department Expresses Antitrust Concerns’ https://www.justice.gov/archives/opa/pr/two-warner-bros-discovery-directors-resign-after-justice-department-expresses-antitrust accessed 18 May 2026; US Department of Justice, ‘Two Pinterest Directors Resign from Nextdoor Board of Directors in Response to Justice Department’s Ongoing Section 8 Enforcement’ https://www.justice.gov/archives/opa/pr/two-pinterest-directors-resign-nextdoor-board-directors-response-justice-departments-ongoing accessed 18 May 2026.↩︎
Case COMP/M.1080 Thyssen/Krupp, Commission Decision of 2 June 1998; Case COMP/M.1712 Generali/INA, Commission Decision (2000); Case COMP/M.2431 Allianz/Dresdner, Commission Decision (2001); Case COMP/M.2567 Nordbanken/Postgirot, Commission Decision (2001).↩︎
Competition Act 89 of 2018, s 4(2).↩︎
