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8/4/2009
10:41 AM
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FTC Probing Apple-Google Links

A federal review began in spring and has found various connections including the service of Al Gore on both boards of directors.

The resignation of Google's chief executive Eric Schmidt from Apple's board of directors may not be enough to satisfy the Federal Trade Commission, which has been investigating the interlocking relationships between Apple and Google.

The FTC plans to continue its investigation, which began in earnest in the spring, according to media reports.

A review of the directors' boards of both firms finds various connections between the two firms. Former Genentech CEO Arthur Levinson, for example, is a director of both companies, as was Schmidt.

Former Vice President Al Gore, a director of Apple since March of 2003, has also been a long-serving senior advisor to Google. Gore played a key role in the exoneration of complaints on stock option issues that had been made against Apple chief executive Steve Jobs.

Gore has also been a long time partner in Silicon Valley venture capital powerhouse Kleiner Perkins Caufield & Byers whose partner John Doerr is a member of the Google board. Another Google director, Ann Mather, came to the company in November of 2005 from movie animation company Pixar where she had been chief financial officer. Pixar was bought in the 1980s by Jobs, who turned it into a successful enterprise before selling it to the Walt Disney Company in 2006.

What, if anything, does all this mean? Absolutely nothing, except possibly to demonstrate the exclusive club environment that exists in high technology companies where the same people often raise money for companies, nurture them to success, and then ride the next wave of innovation together. There has been no indication of wrongdoing due to any of the interconnecting relationships between Apple and Google.

Schmidt was named to Apple's board in August of 2006 and immediately became an advocate for Apple products. At first, there was no visible major competition between the two firms, but after Google unveiled its Android mobile phone platform, Google was on a long term trajectory to compete some day with Apple's iPhone platform. Then in recent months, Google unveiled its Chrome operating system, signaling that the two firms would likely compete in another area. Schmidt resigned the Apple position on Monday.

Consumer rights organization Consumer Watchdog hailed Schmidt's decision to resign. In a statement, the organization said: "We're glad Schmidt finally did the right thing."


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