Google, Apple Face FTC Probe

    May 5, 2009

The Federal Trade Commission (FTC) has launched an inquiry into whether the overlap of directors on the boards of Apple and Google violates antitrust laws.

The FTC has notified both companies of the inquiry, according to people familiar with the situation.

Eric Schmidt
Eric Schmidt

Google Chief Executive Eric Schmidt and former Genetech CEO Arthur Levinson sit on the boards of both companies. Under federal antitrust law, a person is not allowed to be on the board of two companies if it reduces competition between them.

Antitrust experts say that such probes rarely lead to major confrontations between businesses and the government. Executives usually decide to step down from the board of a competitor rather than face a legal battle.

The two companies compete in a variety of areas, most notably the fast-growing smartphone market.

Apple’s iPhone has been popular and a solid performer for the company, while Google’s Android operating system powers the T-Mobile G1. Google has said that Schmidt excuses himself from Apple board meetings when the iPhone is discussed.

The FTC investigation was reported earlier by the New York Times.

Separately, Google is facing an antitrust probe by the Justice Department over its class action deal it reached with publishers and authors to digitize and sell books.