WASHINGTON—Seven directors on the boards of five companies have resigned because of the Justice Department's concerns over the directors holding similar board positions at rival companies, the department said on Wednesday.
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.
SolarWinds said in a legal filing dated Oct. 14 that the three board members had decided to resign after receiving a letter from the Department of Justice (DOJ) alleging that their board service broke antitrust law. The filing said that they "chose to resign rather than to contest the allegations."
The other two companies did not immediately respond to a request for comment.
The Justice Department's 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 Justice Department’s Antitrust Division, in a statement.
The push to enforce rules about interlocking directorates comes during a generalized increase in antitrust enforcement, including an unusually large number of merger challenges, many of which the government lost.
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.
A spokesperson for Udemy said a director stepped down on Sept. 23 because of Justice Department concerns. "There was no finding that we violated any law, and we believe that we have resolved any concerns that the DOJ may have," the spokesperson said in a statement.
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.
None of the other companies responded to a request for comment.