DOJ Says Antitrust Pressure Has Lead To 7 Board Directors Resignations

Seven members of the board of directors at five companies have resigned because of the DOJ’s antitrust concerns over the directors holding similar board positions at rival companies, the department said on Wednesday.

The DOJs Antitrust Division said in a statement that it planned to reinvigorate enforcement of rules that do not allow people to serve on the boards of companies that compete against each other.

“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 Jonathan Kanter, head of the DOJ Antitrust Division, in a statement.

Three directors resigned from the board of IT management software company SolarWinds Corp, one because the person was on the boards of both SolarWinds and rival Dynatrace as a representative of the private equity company Thoma Bravo. Two others representing Thoma Bravo on the SolarWinds board also resigned, the department said.

There has been pressure for years for the agencies to be more aggressive in enforcing rules about interlocking directorates because of fears that people will share competitively sensitive information or not have incentive to compete.

A director also resigned from education software company Udemy Inc’s board of directors because of concerns that the person represented technology investment company Prosus on both Udemy’s board and the board of rival Skillsoft Corp, the department said.

Directors also resigned from the board of Definitive Healthcare, Redwire Corp and CTS Corp because they were on the boards of competing companies, the department said.