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FTC to continue Apple, Google probes despite Schmidt

updated 05:10 pm EDT, Mon August 3, 2009

AAPL, GOOG probes proceed

The resignation of Eric Schmidt from Apple's board of directors will not put to rest a Federal Trade Commission investigation, says the group's Bureau of Competition director, Richard Feinstein. Apple announced Schmidt's departure early Monday morning, citing the existence of Chrome OS as a potential conflict of interest. It is illegal for two US companies to share directors when they are also nominally competing in the same field.

Feinstein comments, however, that the FTC will proceed with a look into the "remaining interlocking directorates between the companies." Still linking the boards of Apple and Google is Arthur Levinson, the chairman of biotechnology giant Genentech. Operating systems are also not the only area in which Apple and Google compete, as they both have investments in areas such as smartphones and web browsers.

Apple and Google are in other ways confronting each other however, most recently over Google Voice, which was rejected from Apple's App Store. AT&T has denied FCC suggestions that Apple blocked the app on its behalf. Through Voice, iPhone users can theoretically bypass normal text messaging and long-distance rates.

Both companies may be able to dodge FTC scrutiny if Google can show that less than 2 percent of its revenue is derived from products competing with Apple, according to a source briefed on the investigation. The provision is said to be a part of Section 8 in the Clayton Antitrust Act. It may be difficult to evaluate Google's revenue however, since much of its software is designed to drive advertising sales.

by MacNN Staff



  1. malax

    Joined: Dec 1969


    Of course

    Clearly Arthur Levinson is the mastermind behind the success of both Apple and Google. Thanks to his nefarious back-room deals the two companies have virtually eliminated their competitors. You think Apple would have 70 of the market for iPod-like things and Google would have 70 of the search market if it weren't for A-Lev? Think again, my friend. I predict he'll be fleeing to Venezuela or other asylum-granting country soon.

  1. testudo

    Joined: Dec 1969



    This just shows you why Boards of Directors are basically useless, filled with Yes-Men for CEOs while collecting nice checks. And they usually also are board members of other companies, if not also executives at even other companies (one gigantic boys club).

    Exactly what is a chairman of a drug company doing on the board of a tech company? Helping them determine the best way to get through the FDA minefield? Same goes for a guy like Gore.

    But you also can't put anyone on your board who knows your markets, because then you've got conflicts of interests. So you end up with losers like Bill "We support the Macintosh! Have you seen Quicken 2007 lately? Sure, it's the same as Quicken 2001, but we compiled it for OS X!" Campbell.

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