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

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@usdoj.gov.