So, by now you’ve probably heard that Google CEO Eric Schmidt resigned from Apple’s board of directors this morning. You’d think that this would be the end of the FTC investigation into the close ties between Apple and Google, right? Wrong.
The FTC has released a statement commending Schmidt and Apple’s mutual decision for him to step down, but it warns that the investigation is not over yet. Here’s their exact wording:
“We have been investigating the Google/Apple interlocking directorates issue for some time and commend them for recognizing that sharing directors raises competitive issues, as Google and Apple increasingly compete with each other,” said Bureau of Competition Director Richard Feinstein. “We will continue to investigate remaining interlocking directorates between the companies.”
So what gives? Well first of all, Schmidt is hardly the only tie between the two companies. Genentech CEO Arthur Levinson remains on the board for both Apple and Google. While his conflict is obviously not as big as Schmidt’s was, it wouldn’t be all that surprising to see Levinson leave one of those board seats now that Google and Apple have businesses that are increasingly overlapping.
Also interesting is the tie between former Vice President Al Gore with Apple and Google. While he resides on Apple’s board, he also serves as a senior advisor to Google. And he’s a partner at Kleiner Perkins which has ties to both Apple and Google.
And that’s just the overlap in people. What this really boils down to is what, if anything, the two companies are doing with regards to their products to be anti-competitive.
There has been no shortage of talk and speculation that Apple and Google have worked together behind the scenes on some key deals. One of those was multi-touch support in the Android operating system. Google has so far not included it in Android, and it was supposedly done because of an agreement with Apple.
Also, Google recently revealed that it had made a Google Latitude app for Apple’s iPhone, but that it instead turned it into a web app at Apple’s behest. The reason was that Apple said it too closely resembled its own Maps application — which Google also helped create.
And now we have the whole Google Voice situation. Apple rejected the Google Voice app and removed all the related apps that it had previously accepted. And things get even more complicated when you consider that while AT&T is issuing what appear to be non-denial denials. A few sites, including this one, have heard that AT&T played a role in that. The FCC is looking into the matter separately from the FTC, but obviously, it’s at least somewhat related.
So what’s the fallout from this continued investigation? Probably not too much. As we said, Levinson may have to choose a side and step down from one board. But it seems like if that happens, Gore could be safe, since he’s not technically a part of the “interlocking directorates,” as the FTC puts it.
And as we wrote back in May when the FTC first launched this investigation, Schmidt was probably safe at the time, and it was more of a warning shot. And given his statement about having no plans to leave Apple’s board a few days later, he clearly thought so too. But then Chrome OS happened, and that changed everything. Schmidt was already excusing himself from the part of Apple meetings where they discussed the iPhone (because of Google Android), and now he would have likely had to do the same with OS X (because of Chrome OS). That’s what Apple CEO Steve Jobs more or less said in his statement this morning.
But it seems like it’s this Google Voice business that really pushed the situation over the top. Not only was the FTC looking into the relationship between the companies, but now the FCC is. The fact that the FCC investigation was launched on Friday and this news comes to following Monday, seems to say a lot. Schmidt was always going to have to leave Apple’s board because of Chrome OS, but that is still months away. The FCC investigation seems to accelerate the departure process.
The main goal of the FTC investigation was obviously Schmidt, which is why it released the statement today. But unless they find evidence of collusion in continuing the investigation, its part of this should conclude. But the FCC investigation will remain a very interesting one to watch.
[photo: flickr/TheAlieness GiselaGiardino]
your last paragraph is a failed attempt to include at&t into this. You buy every product apple sells and you cant believe they pulled the google app so you blame at&t.
hint: google voice was an apple available worldwide. at&t is only a provider for the iphone in the US. thats it, nothing more. the google voice isnt available anywhere in the world, so how would at&t be involved in APPLES app store? at&t offers similar apps on other phones anyways
your last paragraph is a failed attempt at english.
Really? I mean I don’t agree with the guy either, but you’re a staffed writer here. Show some class. His grammar and spelling wasn’t even that bad. I tend to stray away from sites whose writers act like children in the comment section.
+1
I totally agree. As a staffer, you come off as extremely bitchy MG. Way to lose credibility!
I’m not sure what exactly you are saying in the article.
@anonymous – Google Voice is only available in the USA. They only offer US numbers, and (used too, I can’t verify this as I’m in the US now) limit signup to US IP ranges when they were GrandCentral
They should let the Voice application on the iPhone. Simple as that. What is up their asses?
@anonymous Burn
As the world turns…
Pondering how Apple should or should not exercise control over the App approval process, three analog examples to consider:
1.) Walmart: buyers at this, or any other retailer, have complete control as to the vendors and which products go on their shelves. They are not bound by any anti-trust legislation, at least I can’t think of any at first blush.
2.) Amazon: an on-line retailer also has complete control as which vendors and product is offered via their web site. Similar to Walmart.
In previous posts, I argued that discriminating on the App Store, Apple needs to avoid business practices which lead to anti-competitive markets (see Sherman & Clayton Antitrust). Though you could argue that the App Store is a retail outlet and gives Apple the same control as afforded to Amazon or Walmart.
However, if the App Store is a platform then perhaps not.
Hmmm.
Excellent little read. Glad the FTC are still investigating what is definitely an unfair and bias conflict
Ramble as much as you like, but the financial times say:
“Although it has only now come to light, the decision to bar Google Voice was taken some weeks ago and was not the cause of any immediate deterioration in relations between the companies, according a person familiar with the development.”
Not the cause of any “immediate” “deterioration” in “relations”. Very vague and non-committal language. I think they still have “relations”, but I also think now they are more competitive with each other, which is consistent with the entire article.
Don’t you think Eric Schmidt would like to see the Google Voice app on the iPhone? And what does Steve Jobs have to gain from the Google Voice iPhone app? Windows Mobile/Phone has a contact list, call and SMS web-management system, I think. I believe I saw it in a recent hands-on video with a “Windows Phone”. I only assume that Apple has something similar in the works.
Google and Apple have complemented each other for at least a few years. Google promotes operating system independence with its web apps. Apple provides a compelling user experience and a rich desktop platform for non-web apps. They colluded, I think. But I don’t think they’ll get caught, and maybe they didn’t even break the law.
Now I’m wondering what happened with the Google Voice iPhone app rejection. Was it about AT&T’s revenues, or does Apple want to promote its own phone management system (with MobileMe perhaps)? Or both? It seems like rejecting the Google Voice iPhone app protects both AT&T’s and Apple’s revenues, and it blocks Google’s attempts at controlling the consumer mobile telephony experience. Apple isn’t going to make it easy for Google.
However, I am confused by this part of the article:
“But it seems like it’s this Google Voice business that really pushed the situation over the top. Not only was the FTC looking into the relationship between the companies, but now the FCC is. The fact that the FCC investigation was launched on Friday and this news comes to following Monday, seems to say a lot. Schmidt was always going to have to leave Apple’s board because of Chrome OS, but that is still months away. The FCC investigation seems to accelerate the departure process.”
Hold on. Isn’t that the most controversial statement in your entire article? Any reasons or proof? It would seem that the Google Voice iPhone app rejection would suggest a lack of collusion. Are you suggesting that Google and Apple have something to hide, and the FCC investigation could reveal it? That would be interesting.
Collusion on multi-touch makes sense given Apple’s IP in that area. As for the rest of the applications, Apple now see’s Google as M.S. lite. Pretty soon other people are likely to be wary of free things from google.
what a drama unfolding – this should be fun to watch
What is wrong with apple the progress is going on, they can’t ban voice it will fight it’s way to masses.