FTC Commends Schmidt For Stepping Down, But The inspection Continues

August 3, 2009 ·Filed Under Technology News

So, by now you’ve probably heard that Google CEO Eric Schmidt resigned from Apple’s board of directors that dawn. You’d think that that would be the end of the FTC examination into the close ties within 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 exploration is not by yet. Here’s their exact wording:

“We have been investigating the Google/Apple interlocking directorates issue for some date 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 amidst the companies.”

So what gives? Well first of all, Schmidt is hardly the only tie amoung the two companies. Genentech CEO Arthur Levinson remains on the board for both Apple and Google. While his clash 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 amoung former Vice President Al Gore with Apple and Google. While he resides on Apple’s board, he additionally 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 society. What that really boils down to is what, whether 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 considering 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 plus 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 seem to be non-denial

denials. A few sites, including that 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 that continued exploration? Probably not too much. As we said, Levinson may have to choose a side and step down from one board. But it seems like whether that happens, Gore could be safe, since he’s not technically a part of the “interlocking directorates,” as the FTC puts it.

And as we wrote back in May when the FTC first launched that study, Schmidt was probably safe at the instance, and it was more of a warning shot. And given his statement about having no plans to leave Apple’s board a few days later, he clearly thought so too. But thereupon Chrome OS happened, and that changed everything. Schmidt was already excusing himself from the part of Apple meetings where they discussed the iPhone (because of Google Android), and now he would have likely had to do the same with OS X (because of Chrome OS). That’s what Apple CEO Steve Jobs more or less said in his statement that wee hours.

But it seems like it’s that Google Voice business that really pushed the situation by the top. Not only was the FTC looking into the relationship amoung the companies, but now the FCC is. The fact that the FCC study was launched on Friday and that news comes to following Monday, seems to say a lot. Schmidt was always going to have to leave Apple’s board considering of Chrome OS, but that is still months away. The FCC inspection seems to accelerate the departure process.

The main goal of the FTC study was obviously Schmidt, which is why it released the statement today. But unless they find evidence of collusion in continuing the analysis, its part of that should conclude. But the FCC exploration will remain a very interesting one to watch.

[photo: flickr/TheAlieness GiselaGiardino]

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