FTC: Are Google and Apple's boards a bit too cozy?

We've all been wondering for a while why Google's Schmidt is still on Apple's board, and now the FTC is getting curious as well. The New York Times reports that the Federal Trade Commission has launched an inquiry into the close ties between the boards of Google and Apple. And that may mean the end of the two boards' cozy relationship.

The Clayton Antitrust Act of 1914 prohibits a person's presence on the board of two rival companies when it would reduce the competition between them. Google and Apple's boards actually share two directors, Eric Schmidt and Genentech's Arthur Levinson, and what's more interesting to the FTC, they also share a market for several competing products--including mobile phone OSes, browsers, music and video distribution and even photo editing wares. And as we pointed out earlier, we've already seen where such close relationships lead when Google caved to Apple and voluntarily dropped the multitouch capability from the G1 phone.

And now that Google's Android is being considered as a netbook OS, Google and Apple could be adding yet another competing arena to their relationship. Experts say that such inquiries rarely lead anywhere, since the board members in question usually step down to avoid further scrutiny. And since that's been Google's modus operandi when faced with regulatory scrutiny in the past, it's probably safe to say Eric Schmidt's days on Apple's board are numbered. Stay tuned.

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