NY Times: Apple & Google Conspiracy

The New York Times published an article regarding the Federal Trade Commission's inquiry into ties between Apple's and Google's Board of Directors: "Board Ties at Apple and Google Are Scrutinized".

"Apple and Google share two directors, Eric E. Schmidt, chief executive of Google, and Arthur Levinson, former chief executive of Genentech. The Clayton Antitrust Act of 1914 prohibits a person’s presence on the board of two rival companies when it would reduce competition between them. The two companies increasingly compete in the cellphone and operating systems markets.

Antitrust experts say the provision against 'interlocking directorates,' known as Section 8 of the act, is rarely enforced. "

Because Apple and Google compete and partner in many areas ("co-opetition"), the FTC wants to make sure there is no collusion or conflict of interest:

- Google, for instance, worked with Apple to design early versions of some its services, like Gmail and Google Maps,.

- Mobile phones, in particular, loom large in the future of both Google and Apple. Much of Apple’s fortunes these days are tied to the success of the iPhone.

- Google, for its part, has said repeatedly that one of its biggest strategic opportunities is to expand its online advertising empire into mobile phones... It also produces the Android operating system for mobile phones that compete with the iPhone. The system currently powers the T-Mobile G1, a phone that some analysts say is the most capable of a number of rivals.

- The Android operating system is being built into lightweight portable computers known as netbooks, which may compete with some Apple laptops

- Apple makes the Safari Web browser while Google makes the competing Chrome.

- Apple’s iTunes and Google’s YouTube are increasingly competing as venues for distribution of music and videos. And the two companies have photo-editing services.

- Both Google and Apple share a rival in Microsoft, which competes with the two companies in some areas.

- "Mr. Schmidt joined Apple’s board in 2006, about five months before it unveiled the iPhone. Google announced its plans for Android, its mobile phone operating system, nearly a year later. Since then, analysts have speculated that Mr. Schmidt’s position on Apple’s board could become untenable. Google has said he recuses himself when Apple’s board discusses mobile phones."