May 4th, 2009
NYT: FTC launches antitrust inquiry into Google's, Apple's boards
The Federal Trade Commission has launched an inquiry into both Google and Apple, exploring whether “close ties” among the boards amounts to a violation of antitrust laws, according to a report in the New York Times that cites anonymous sources. The companies share two directors - Google CEO Eric Schmidt and former Genentech CEO Arthur Levinson.
The Times reports:
The Clayton Antitrust Act of 1914 prohibits a person’s presence on the board of two rival companies when it would reduce competition between them. Antitrust experts say the “interlocking directorates” provision, known as Section 8 of the act, is rarely enforced. Nevertheless, the agency has already notified Google and Apple of its interest in the matter…
In most instances, the executives typically choose to resign from the board of a competitor instead of getting caught up in an investigation or legal matter, experts told the Times.
Apple and Google are both partners and competitors. The companies worked together to develop Gmail and Maps apps for the iPhone, for example. But they also compete on services such as photo software (iPhoto vs. Picasa), mobile operating systems (iPhone vs. Android) and even Web browsers once Google launches its Chrome browser for the Mac. Apple makes the Safari browser.
It’s unclear which areas of possible conflict the FTC might have been eyeing when it launched its inquiry, the Times reported.
Previous coverage: Apple boardroom gains Google’s Schmidt
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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