Directors Resign from the Boards of Five Companies in Response to Justice Department Concerns about Potentially Illegal Interlocking Directorates

[Gunnar Larson]

https://www.justice.gov/opa/pr/directors-resign-boards-five-companies-response-justice-department-concerns-about-potentially


Wednesday, October 19, 2022
Directors Resign from the Boards of Five Companies in Response to Justice
Department Concerns about Potentially Illegal Interlocking Directorates
Resignations Reflect Antitrust Division’s Efforts to Reinvigorate
Enforcement and Deter Violations of Section 8 of the Clayton Act

WASHINGTON - The Justice Department announced today that seven directors
have resigned from corporate board positions in response to concerns by the
Antitrust Division that their roles violated the Clayton Act’s prohibition
on interlocking directorates. Section 8 of the Clayton Act (Section 8)
prohibits directors and officers from serving simultaneously on the boards
of competitors, subject to limited exceptions. Over the last several
months, the Division announced its intent to reinvigorate Section 8
enforcement. This announcement is the first in a broader review of
potentially unlawful interlocking directorates.

“Section 8 is an important, but underenforced, part of our antitrust laws.
Congress made interlocking directorates a *per se* violation of the
antitrust laws for good reason. Competitors sharing officers or directors
further concentrates power and creates the opportunity to exchange
competitively sensitive information and facilitate coordination – all to
the detriment of the economy and the American public,” said Assistant
Attorney General Jonathan Kanter of the Justice Department’s Antitrust
Division. “The Antitrust Division is undertaking an extensive review of
interlocking directorates across the entire economy and will enforce the
law.”

By eliminating the opportunity to coordinate – explicitly or implicitly –
through interlocking directorates, Section 8 is also intended to prevent
other violations of the antitrust laws before they occur. In response to
the Division’s competition concerns, the following companies and directors
unwound the interlocks without admitting to liability:

   1. *Definitive Healthcare Corp. and ZoomInfo Technologies Inc. *–
   Definitive and ZoomInfo operate go-to-market information and intelligence
   platforms used by third-party sales, marketing, operations, and recruiting
   teams across the United States. One director served simultaneously on the
   boards of both companies and resigned from Definitive’s board in response
   to the Division’s concerns about the alleged interlock.


   1. *Maxar Technologies Inc. and Redwire Corp. *– Maxar and Redwire are
   providers of space infrastructure and communications products and services.
   One director served simultaneously on the boards of both companies and
   resigned from Redwire’s board in response to the Division’s concerns about
   the alleged interlock.


   1. *Littelfuse Inc. and CTS Corp.* – Littelfuse and CTS are
   manufacturers of components and technologies for use in transportation
   applications, including sensors and switches for use in passenger and
   commercial vehicles. One director served simultaneously on the boards of
   both companies and resigned from CTS’s board in response to the Division’s
   concerns about the alleged interlock.


   1. *Skillsoft Corp. and Udemy Inc. *– Skillsoft and Udemy are providers
   of online corporate education services. One director served simultaneously
   on the boards of both companies, as did the investment firm Prosus, through
   that director, because he represented Prosus on both boards at the same
   time. The director resigned from Udemy’s board in response to the
   Division’s concerns about the alleged interlock.


   1. *Solarwinds Corp. and Dynatrace, Inc. *– Solarwinds and Dynatrace are
   providers of Application Performance Monitoring (APM) software. One
   director served simultaneously on the boards of both companies, as did the
   investment firm Thoma Bravo, through this director, because he represented
   Thoma Bravo on both boards at the same time. Two additional directors also
   represented Thoma Bravo on the Solarwinds's board. All three directors
   resigned from Solarwinds’s board in response to the Division’s concerns
   about the alleged interlock.

Companies, officers, and board members should expect that enforcement of
Section 8 will continue to be a priority for the Antitrust Division. Anyone
with information about potential interlocking directorates or any other
potential violations of the antitrust laws is encouraged to contact the
Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or
antitrust.complaints at usdoj.gov.
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