Google’s chairman and CEO, Eric Schmidt, sits on Apple’s board, and Arthur Levinson, former CEO of pharmaceuticals maker Genentech, also has a seat on both boards.
The 1914 Clayton Antitrust Act states that companies cannot share participants when competition would be inhibited. Google now has an operating system that runs on certain cell phones and Apple, of course, has the iPhone with its own OS. Reportedly, Schmidt recuses himself from Apple’s board when discussions center on the iPhone, but that might not be enough of a defense to prevent regulators from fining Google and Apple, or worse.
It’s also of note that the Obama Administration isn’t afraid to probe companies with which it has ties. Schmidt campaigned for Barack Obama during last year’s presidential race and at one point was considered a leading contender for the new national CTO position. Schmidt now serves on a science and tech advisory council for the president.
The New York Times broke the story and could not get comment from the FTC, Google, Apple or Levinson.