Even after Google chief executive Eric Schmidt stepped down from the Apple Board of Directors due to anticompetitive concerns, both companies remain under scrutiny from the Federal Trade Commission because of another commonality.
Arthur Levinson, former CEO of Genentech, serves on the boards of both Apple and Google. If federal scrutiny continues, he may be forced to resign from one of his positions in order to satisfy the FTC.
"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,†Richard Feinstein, director of the FTC's Bureau of Competition, said in a statement. “We will continue to investigate remaining interlocking directorates between the companies.â€
Schmidt's resignation and the FTC's continued interest in Apple and Google come as both companies remain the subject of another U.S. government investigation. The Federal Communications Commission is currently looking into Apple's App Store approval process due to the recent rejection of the Google Voice software.
Last week, letters were sent to Apple, AT&T and Google asking them to explain their roles in both rejecting Google's own app, as well as pulling at least two third-party apps that were already available that also used the Google Voice service. The letters also ask AT&T whether it was asked for an opinion on the matter, and for Google to outline both Google Voice as well as whether Google has had other apps approved. Google has only released a handful of apps, but has ported over Google Earth from the desktop and used once-hidden programming instructions from Apple to develop the voice search component of Google Mobile App for the device.
In addition to the Google Voice controversy, the FCC is looking into exclusive handset deals like the one between Apple and AT&T for the iPhone. Bowing to federal pressure, Verizon Wireless recently agreed to allow some exclusive handsets access on smaller, rural carriers' networks to promote competition.
The FCC was asked in June by four U.S. Senators to look into exclusive contracts like the one between AT&T and Apple, or the agreement between Sprint and Palm for the Pre. The request came from a petition filed by the Rural Cellular Association, a group of smaller tier II and tier III wireless carriers that provide service to parts of the U.S. where tier I brands like AT&T, Verizon, Sprint and T-Mobile do not. The Rural Cellular Association has argued that their inability to provide their customers with some of the most popular mobile handsets and smartphones makes it difficult for them to compete, especially in markets where their coverage does overlap with some of the big tier I operators.