Submitted by The Federal Trade Commission in the United States has started an inquiry into the close ties between the boards of Apple and Google. They are wondering if the close ties constitute a violation of antitrust laws now that the two companies are increasingly participating in the same markets.
Both Eric E. Schmidt, chief executive of Google, and Arthur Levinson, former chief executive of Genentech, sit on the boards of both Apple and Google. This isn’t necessarily a problem, were it not for the fact that the two companies are increasingly entering the same markets. The iPhone and Android, Safari and Chrome, iPhoto and Picasa, and so on.
The Clayton Antitrust Act of 1914 states that companies who are competitors may not share board members if it will reduce competition. This aspect of the Act (“Section 8”) is rarely invoked, but nevertheless, the FTC has already notified both companies of its intentions. It is not known whether or not the FTC has any specific market in mind it deems especially troubling.
“Government actions under Section 8 are rare, but they are brought under circumstances when the presence of a common director on competing boards is likely to be anticompetitive,” said Andrew I. Gavil, an antitrust expert and a professor at the Howard University School of Law.
Both Apple and Google, as well as the FTC, declined to comment on the matter.
want to go after someone that might actually need some regulation before they get out of control? Might want to look here.
So, the people they are currently ‘going after’ are beyond control now??
Yes, I don’t imagine that, say, Amazon relishes the idea of an Mac OS tablet PC that can do e-books better than the Kindle, the e-books being supplied by Google. Quite hard to see how folks sitting on the same boards could keep all that separate, but what do I know. A strict separation does sound a good idea even if only to ensure that folks stay well above suspicion.
They are barred from conflict of interest meetings.
However, I wouldn’t blink an eye if Schmidt were told to resign.
Good point, though I guess we might blink an eye if Schmidt were told to resign – and resigned from Google.
Although I see the links between the two, I do think the accusations is a stretch of the imagination. The equivalence of their accusations would be me to claim that because there are directors on different software companies, they all refuse to support Linux, Conclusion: they are working with Microsoft to prop up their monopoly in the operating system business.
I support the need for oversight but at the same time I think that one needs to realise that there are ‘investigations’ that go on all the time based on complaints raised. This complaint may or may not even be valid – just like when an SEC does an investigation and find there is nothing untoward taken place in the financial reporting.
So I think people need to stand back, take a deep breath and realise that this is only an investigation – innocent till proven guilty.
On second thoughts, this comment is better not made.
Edited 2009-05-06 07:37 UTC
How can the government accuse these companies of potentially violating antitrust laws, when they themselves violated the antitrust acts of 1890 with the recent bailout crap? Seems too much of a double standard to be legal in any way.