Google, Apple Board Members on FTC Collusion Watch

The Federal Trade Commission (FTC) is investigating a pair of Google board members who fulfill similar roles with tech giant Apple. Such a set-up would be illegal if it in any way affects competition between the two companies.

The investigation involves Google chief Eric Schmidt and fellow board member Arthur Levinson. Neither company, nor the FTC, have commented on the story, which recently broke through the New York Times. (Source: nytimes.com)

The FTC is reportedly looking into potential breaches of the 1914 Clayton Antitrust Act which bans people from sitting on the board of two competing firms if their position reduces competition between the companies.

Competition Breach Unclear

On the face of it, Google and Apple compete with one another in several areas. The most notable is Google's Android phone operating system as a rival to the iPhone, but there are also battles between the Chrome and Safari browsers. Even the forthcoming launch of Android on netbooks could be viewed as competition for MacBooks and their Leopard OS.

There's no official word yet on what areas of business the FTC is looking at, though it's possible it involves the way Google worked with Apple to make iPhone-friendly versions of services such as Gmail and Google Maps. However, it's known that Schmidt leaves the room during Apple board meetings when the iPhone is discussed, as he recognizes the potential conflict of interests. (Source: wsj.com)

Persuasion More Likely Than Force

In theory, the law does allow the government to force changes. However, this is rare, primarily because it is difficult to conclusively prove that a director's twin posts are specifically responsible for limiting competition. It's more common that an investigation would put enough pressure on a director that they resign from one of their posts.

While there is no evidence yet that the Google-Apple set-up stretches or breaches the law, if that was to be the case it seems most likely it would be settled by Schmidt leaving Apple and Levinsen leaving Google.

The New York Times notes that the investigation comes despite concerns that Google was too close to Barack Obama's administration. Schmidt was part of Obama's official transition team and was recently appointed to his advisory council on science and technology.