Seven members of corporate boards resigned after the Antitrust Division of the Department of Justice (DOJ) flagged their situations as potential violations of the Clayton Act.
Assistant Attorney General Jonathan Kanter, head of the Antitrust Division, put companies on notice during a speech delivered in April that he intended to begin ramping up enforcement of Section 8 of the Clayton Act, which prohibits directors and officers from sitting on boards of competing businesses.
The agency warned again in a press release Wednesday the seven resignations were just the first action “in a broader review of potentially unlawful interlocking directorates.”
“Congress made interlocking directorates a per se violation of the antitrust laws for good reason,” said Kanter, who was confirmed to lead the Antitrust Division last November.
“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,” Kanter said. The division’s review of interlocking directorates will encompass businesses across the entire economy, he said.
Abiding by Section 8 eliminates the opportunity for businesses to coordinate “explicitly or implicitly” through cross-board relationships and prevents antitrust violations before they occur, the DOJ said.
The companies that “unwound” their interlocks and saw resignations of board members after being contacted by the DOJ included:
- Solarwinds Corp., where three directors affiliated with investment firm Thoma Bravo resigned. One of the Thoma Bravo directors represented the firm at Solarwinds and its competitor Dynatrace at the same time.
- Definitive Healthcare Corp., where one director resigned because of their presence on the board of ZoomInfo Technologies.
- Redwire Corp., who lost a director also serving on the board of Maxar Technologies.
- CTS Corp. lost a director also on the board of Littlefuse.
- Udemy lost a director representing the investment firm Prosus concurrently at Skillsoft Corp.
The DOJ is actively soliciting tips from citizens to uncover other board-related violations of Section 8.
- Antitrust Division
- Boards & Shareholders
- Clayton Act
- Computer Hardware & Software
- CTS Corp.
- Definitive Healthcare
- Department of Justice
- Jonathan Kanter
- Maxar Technologies
- Redwire Corp.
- Regulatory Enforcement
- Regulatory Policy
- Section 8 of the Clayton Act
- Solarwinds Corp.
- United States
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