FTC Investigates Apple, Google Board Ties, NYT Says (Update2)
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By Ville Heiskanen and Connie Guglielmo
May 5 (Bloomberg) -- The U.S. Federal Trade Commission is examining whether Apple Inc. and Google Inc. are breaking antitrust laws by sharing board members, the New York Times reported, citing several people briefed on the inquiry.
Google Chief Executive Officer Eric Schmidt and Arthur Levinson, chairman of Genentech Inc., serve as directors at Apple and Google. Antitrust law prohibits someone from serving on boards at two rival companies because it may reduce competition.
Schmidt has been on the board of Google since 2001 and that of Apple since 2006. Levinson served at Google since 2004 and at Apple since 2000. The overlaps may violate the Clayton Antitrust Act of 1914, said Gary Reback, an attorney with Carr & Ferrell LLP in Palo Alto, California.
“The theory of the law when the Clayton Act was first passed is that the powerful people would sit on each other’s boards and not compete with each other,” Reback said. “The overlaps between Google and Apple are obvious.”
Apple offers the iPhone, which runs Google maps and gives users the ability to play videos from Google’s YouTube service. Google, owner of the world’s most used search engine, last year created its own mobile-phone operating system software called Android to compete.
FTC spokeswoman Claudia Bourne-Farrell declined to comment. Apple, the maker of the Macintosh computer and iPod media player, also declined to comment, said spokesman Steve Dowling. Levinson declined to comment, said Geoffrey Teeter, a spokesman for drugmaker Genentech. Andrew Pederson, a spokesman for Google, declined comment. |
