Google Inc. (NASDAQ:GOOG) CEO Eric Schmidt and former Genentech Inc. chief executive Arthur Levinson sit on the boards of
both Google and Apple Inc. (NASDAQ:AAPL).
According to The New York Times,
that isn't sitting well with the Federal Trade Commission, who thinks it violates the Clayton Antitrust Act of 1914, which prohibits a person's presence on the board of two rival companies when it would reduce competition between them and allow collaboration against other rivals, such as using price discrimination.
While two tech giants compete against each other in some instances, the NYT report notes that Google worked with Apple to design early versions of some of its services, like Gmail and Google Maps, for Apple's iPhone. The iPhone drives a lot of traffic to Google, which dominates Internet search and advertising. However, Google also has its Android operating system that works in tandem with other companies like T-Mobile.
The simplest answer to the probe would be for either Schmidt or Levinson to step down.
Last week, the Justice Department
opened an inquiry into a settlement Google made with authors and publishers over Google Book Search -- which actually has a pretty
cool way of scanning books. The deal is being scrutinized as it would give Google the right to share million of books whose right holders are unknown and allow it to charge whatever it wants for access to them.
Schmidt also sits on President Obama's Council of Advisors on Science and Technology. Schmidt-Obama ties have come into question over possible leniency to the Web search giant, but the two latest probes may quiet onlookers -- at least for the short term.
In other tech news, it's been reported that Apple may start
designing its own computer chips to thwart hackers and, more recently, that it
may buy microblogging service Twitter Inc. for about $700 million. -
Baz HiralalGo to the storyApple may buy Twitter
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