Justice Department’s Ongoing Section 8 Enforcement Prevents More Potentially Illegal Interlocking Directorates | OPA | Department of Justice

[Gunnar Larson]

https://www.justice.gov/opa/pr/justice-department-s-ongoing-section-8-enforcement-prevents-more-potentially-illegal


FOR IMMEDIATE RELEASE
Thursday, March 9, 2023
Justice Department’s Ongoing Section 8 Enforcement Prevents More
Potentially Illegal Interlocking Directorates
Antitrust Division Continues to Focus on Competitors Sharing Company
Directors in Violation of Section 8 of the Clayton Act
The Justice Department announced today that five more directors resigned
from four corporate boards and one company declined to exercise board
appointment rights in response to the Antitrust Division’s enforcement
efforts around Section 8 of the Clayton Act (Section 8). Section 8, which
Congress made a per se violation of the antitrust laws, prohibits directors
and officers from serving simultaneously on the boards of competitors,
subject to limited exceptions. Today’s announcement brings the number of
interlocks unwound or prevented as a result of the division’s recent
efforts to at least thirteen directors from ten boards.

“Enforcement of Section 8 will continue to be a focus for the division just
as Congress intended,” said Assistant Attorney General Jonathan Kanter of
the Justice Department’s Antitrust Division. “We will continue to enforce
the antitrust laws when necessary to address illegal board interlocks.”

The following companies and directors unwound interlocks or declined to
appoint board members, without admitting liability:

Qualys, Inc., SumoLogic, Inc., and F5, Inc. – Qualys, SumoLogic, and F5 are
providers of cloud security assessments, audit and compliance services, and
firewall and monitoring products and services. One director served
simultaneously on the boards of all three companies. After the division
expressed concerns about the alleged interlock, the director recently
resigned from Qualys’s board and declined to stand for reelection to F5’s
board.
N-able, Inc., Dynatrace, Inc., and SolarWinds Corp. – N-able, Dynatrace,
and SolarWinds are software companies. Representatives of the investment
firm Thoma Bravo sat on all three companies’ boards. As the department
previously announced in October 2022, three Thoma Bravo representatives
resigned from the SolarWinds’s board in response to the division’s concerns
about the alleged interlock between Dynatrace and SolarWinds. Shortly
thereafter, in November 2022, two separate Thoma Bravo designees resigned
from the N-able board.
Brookfield Asset Management Inc. and American Equity Investment Life
Holding Company (AEL) – AEL and a Brookfield Asset Management subsidiary’s
wholly-owned company American National are both insurance companies.
Brookfield and/or its subsidiary appointed the officers or directors on the
American National board. Additionally, the Brookfield subsidiary has the
contractual right to appoint a director to the AEL board, and in December
2022, the Brookfield subsidiary announced that it would exercise that
right. After the division raised concerns regarding the potential
interlock, the Brookfield subsidiary announced it had changed course and it
was withdrawing its proposed nomination to the AEL board.
Sun Country Airlines Holdings, Inc. and Atlas Air Worldwide Holdings, Inc.
– Sun Country and Atlas Air both provide crew, maintenance, and insurance
for domestic air freight routes. In August 2022, an investment group led by
Apollo Global Management, Inc. proposed acquiring all of Atlas Air’s
outstanding shares. At the time, two Apollo-affiliated individuals sat on
the Sun Country board of directors. After the division raised concerns
regarding a potential interlock arising from Apollo’s proposed acquisition
of Atlas Air, the two Apollo-affiliated directors resigned from the Sun
Country board.
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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