United States: DOJ Antitrust Division Anti-Interlocks Campaign Spurs More Board Resignations

Warner and Spectrum Media Companies Shared Board Members

Two directors of Warner Bros. Discovery Inc. (WBD) have resigned from the company's board after the Antitrust Division expressed concerns that their positions on both the WBD and Charter Communications Inc. boards violated Section 8 of the Clayton Act. Section 8, which Congress made a per se violation of the antitrust laws, prohibits the same person or company from serving simultaneously on the boards of competitors, subject to limited exceptions. The division's enforcement efforts to date have unwound or prevented interlocks involving at least two dozen companies, the DOJ says.

Charter, through its Spectrum cable service, and WBD, including through its Max streaming subscription services, both provide video distribution services to customers. Representatives of the privately-held media company Advance Publications Inc. (Advance) had designees on both Charter's and WBD's boards of directors.

Other instances of unwound interlocks include:

American Equity Investment Life Holding Company (AEL) and Brookfield Asset Management Inc. 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.

Atlas Air Worldwide Holdings, Inc. and Sun Country Airlines Holdings, Inc. Both companies 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.

CTS Corp. and Littelfuse Inc. Both manufacture 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.

Definitive Healthcare Corp. and ZoomInfo Technologies Inc. The companies 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.

Dynatrace, Inc., N-able, Inc., and SolarWinds Corp. All three are software companies. Representatives of the investment firm Thoma Bravo sat on all three companies' boards. 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. In November 2022, two other Thoma Bravo designees resigned from the N-able board.

F5, Inc., Qualys, Inc., and SumoLogic, Inc. These 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.

Maxar Technologies Inc. and Redwire Corp. These companies provide 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.

Nextdoor Holdings Inc. and Pinterest. Two directors on the board of Pinterest Inc., provider of an image and information sharing platform, resigned from the board of Nextdoor Holdings Inc., operator of a localized networking platform popular among neighbors and local businesses. Both companies are headquartered in San Francisco and incorporated in Delaware.

Skillsoft Corp. and Udemy Inc. Both provide 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.

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