FTC Commends Schmidt For Stepping Down, But The Investigation Will Continue
So, by now you’ve probably heard that Google CEO Eric Schmidt resigned from Apple’s board of directors this morning. You’d think that this would be the end of the FTC investigation into the close ties between Apple and Google, right? Wrong.
The FTC has released a statement commending Schmidt and Apple’s mutual decision for him to step down, but it warns that the investigation is not over yet. Here’s their exact wording:
“We have been investigating the Google/Apple interlocking directorates issue for some time and commend them for recognizing that sharing directors raises competitive issues, as Google and Apple increasingly compete with each other,” said Bureau of Competition Director Richard Feinstein. “We will continue to investigate remaining interlocking directorates between the companies.”
So what gives? Well first of all, Schmidt is hardly the only tie between the two companies. Genentech CEO Arthur Levinson remains on the board for both Apple and Google. While his conflict is obviously not as big as Schmidt’s was, it wouldn’t be all that surprising to see Levinson leave one of those board seats now that Google and Apple have businesses that are increasingly overlapping.
Also interesting is the tie between former Vice President Al Gore with Apple and Google. While he resides on Apple’s board, he also serves as a senior advisor to Google. And he’s a partner at Kleiner Perkins which has ties to both Apple and Google.
And that’s just the overlap in people. What this really boils down to is what, if anything, the two companies are doing with regards to their products to be anti-competitive.
There has been no shortage of talk and speculation that Apple and Google have worked together behind the scenes on some key deals. One of those was multi-touch support in the Android operating system. Google has so far not included it in Android, and it was supposedly done because of an agreement with Apple.
Also, Google recently revealed that it had made a Google Latitude app for Apple’s iPhone, but that it instead turned it into a web app at Apple’s behest. The reason was that Apple said it too closely resembled its own Maps application — which Google also helped create.
And now we have the whole Google Voice situation. Apple rejected the Google Voice app and removed all the related apps that it had previously accepted. And things get even more complicated when you consider that while AT&T is issuing what appear to be non-denial denials. A few sites, including this one, have heard that AT&T played a role in that. The FCC is looking into the matter separately from the FTC, but obviously, it’s at least somewhat related.
So what’s the fallout from this continued investigation? Probably not too much. As we said, Levinson may have to choose a side and step down from one board. But it seems like if that happens, Gore could be safe, for now. The main goal of the investigation was obviously Schmidt, which is why the FTC released the statement today. And unless they find evidence of collusion in continuing the investigation, the FTC part of this should conclude. But the FCC investigation will remain a very interesting one to watch.
[photo: flickr/TheAlieness GiselaGiardino]
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