May 05, 2009

The Federal Trade Commission is looking into the ties between the boards of Apple and Google, according to reports.

The New York Times said the inquiry involving Google and Apple centers on a possible breach of anti-trust laws.

Google boss Eric Schmidt and former Genentech boss Arthur Levinson sit on the boards of both companies. The Clayton Anti-trust Act of 1941 forbids a person to be on a board of two rival firms at once if it reduces competition between them.

Apple and Google both offer competing web browsers and phone operating systems. However they have worked together, most recently to design versions of some of Google's services like Gmail and Google Maps for the iPhone.

Legal experts say the issue is rarely pursued partly because it is difficult to prove how overlapping directors impinge on business decisions.

Government actions under Section 8 are rare, but they are brought under circumstances when the presence of a common director on competing boards is likely to be anticompetitive, " Andrew I. Gavil from the Howard University School of Law told the New York Times.

One easy solution to the problem would be for either director to step down from one of the two boards. Google, Apple and the FTC have all refused to comment on the report.


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