FTC To Look Into Google, Apple "Intimate" Board Relationship

The US Federal Trade Commission (FTC) will be looking more closely at the rather close relationship enjoyed by Google and Apple, two of the biggest and most influential technology companies in the world.

The New York Times reports that both companies have been alerted and that the investigation is currently at an early stages. The shares of both companies dipped slightly since the news was announced.

Unbeknown to many, Apple and Google share two board members including Eric E. Schmidt, the chief executive of Google, and Arthur Levinson, former chief executive of Genentech. Such a close interaction is considered uncompetitive under US law, following the enactment of the Clayton Antitrust Act of 1914.

The Act prohibits the presence of a member on the board of two competing companies as it could reduce competition between them and evidently increase the chance of a collusion to create a duopoly or oligopoly.

Both Apple and Google have recently started competing against each other in the mobile sector where the iPhone is facing Google's Android platform. Google is also competing against Apple in the web browsing category where Safari and Chrome are vying for more marketshare.

Schmidt has said in the past that he did not sit on meetings where the iPhone was discussed because of an obvious conflict of interest. It is also interesting to note that, although it is surely only coincidental, Google and Apple seem to be both interested in Twitter.

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Our Comments

The bigger Google and Apple become, the more likely will they start competing against each other. Browsers and Operating systems are only the beginning. That could soon extend to social networking websites, credit cards, business suites, photo editing applications, laptops and more. That said, some have said that Microsoft could have been behind this coup, given that it would pit two of its fiercest rivals against each other.

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