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.