Google's G1 is the biggest enemy of Apple's iPhone. And Apple is making a big push into the Web. So it's totally hunky-dory that Google and Apple share board members, right? Wrong, say antitrust cops.
The FTC, which polices antitrust violations along with the Department of Justice, is investigating Apple and Google for a potential violation of a 1914 law against overlapping boards which may hinder competition.
People in Silicon Valley have long wondered at the close ties between Apple and Google. When Google CEO Eric Schmidt joined Apple's board in 2006, Apple had yet to launch the iPhone and Google wasn't a player in the cell-phone market. But the depth of ties seemed curious, even without that conflict. Genentech CEO Art Levinson already served on both boards, and two Apple board members, Bill Campbell and Al Gore, served as Google advisors. That's a block of four directors — half the board, able to stalemate any Google-unfriendly strategic move.
It's an obvious thing to investigate. But why now, since it's been the case for years? Schmidt campaigned for Barack Obama, and was recently appointed as a science advisor to the president. Fat lot of good that's done him. This is the second antitrust case Google is facing, following one over a settlement with book publishers which critics say would limit competition in book search.
The Obama administration, despite its ties to Schmidt, has signaled that it will be more aggressive in antitrust enforcement (as Democratic administrations usually are). But what else do Google and Apple share, besides directors? A common enemy in Microsoft. And Microsoft has hired Burson-Marsteller, a PR and lobbying outfit which lists "position[ing] technology firms in antitrust cases" as one of its specialties. A Burson-Marsteller executive has denied lobbying against Google on Microsoft's behalf. So modest! At the same time, the firm, run by loathsome unterflack Mark Penn, went as far as to hire Eric Schmidt's ex-girlfriend to help out its tech practice. Revenge is a dish best served with a summons from the antitrust cops.