SolarWinds and Dynatrace directors resign over antitrust issue • The Register

The directors of tech companies SolarWinds, DynaTrace, Skillsoft and Udemy have all resigned after the US Department of Justice raised concerns about overlapping board memberships, which it said created antitrust problems.

The DoJ announced the resignations Wednesday, saying they came after it contacted companies it believed had violated Section 8 of the Clayton Act — a statute that prohibits an individual from serving as a director or officer to be an employee of two competing companies.

“Competitors who share officers or directors further concentrate power, creating an opportunity for the exchange of competitively sensitive information and facilitating coordination — all to the detriment of business and the American public,” said Deputy Attorney General Jonathan Kanter of the Antitrust Division Justice Department, adding the department “is conducting a comprehensive review of interlocking directorates across the economy and will enforce the law.”

The DoJ’s concerns about Solarwinds and Dynatrace centered on the fact that both participate in the application performance monitoring market, but “a director simultaneously served on the boards of both companies, as did investment firm Thoma Bravo.” Two other directors also represented Thoma Bravo on the Supervisory Board of Solarwinds.

A Solarwinds filing names Seth Boro, Michael Hoffmann and James Lines as directors, who resigned effective October 14.

Skillsoft and Udemy had similar issues. Both offer online education services, and the DoJ found that a director who worked for investment firm Prosus sat on the boards of both companies.

The registry Couldn’t find any documentation from Prosus, Thoma Bravo or Dynatrace at the time of writing.

Investment firms are sometimes characterized by expertise in specific sectors, with their senior executives sitting on boards to share experience and knowledge. The DoJ’s warning that it intends to crack down on Section 8 suggests such companies need to be more careful in selecting directors for investee companies.

Other companies that the DoJ tapped into for board members to interlock were:

  • Littelfuse Inc. and CTS Corp. – Manufacturers of components and technologies for use in transportation applications, including sensors and switches for use in passenger and commercial vehicles;
  • Maxar Technologies Inc. and Redwire Corp. – Providers of space infrastructure and communications products and services;
  • Definitive Healthcare Corp. and ZoomInfo Technologies Inc. – providers of market intelligence and information platforms used by third party sales, marketing and recruitment operations.

Each pair of the above companies shared a single director who has resigned. ® SolarWinds and Dynatrace directors resign over antitrust issue • The Register

Rick Schindler

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