FTC Blocks Interlocking Directorate And Makes Good On Its Commitment To Pursue Purported "Unfair Methods Of Competition" As Standalone Violations

For the first time in 40 years, the Federal Trade Commission (FTC) has taken action to enforce Section 8 of the Clayton Act, which prohibits so-called interlocking directorates. In the same action, the FTC mounted its first challenge in decades to a proposed transaction as a standalone violation of Section 5 of the FTC Act, which bars "unfair methods of competition."

On August 16, the FTC approved a consent order effectively undoing a $5.2 billion cash-and-stock deal between private equity firm Quantum Energy Partners and natural gas producer EQT Corporation. According to the FTC, Quantum and EQT are direct competitors in the production and sale of natural gas in the Appalachian Basin. Under the proposed deal, EQT would have acquired two of Quantum's portfolio companies, in exchange for which Quantum would become one of EQT's largest shareholders and receive a seat on EQT's board of directors.