FTC Commends Schmidt For Stepping Down, But The Investigation Continues

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picture-11So, by now you’ve probably heard that Google CEO Eric Schmidt resigned from Apple’s board of directors this morning. You’d think that this would be the end of the FTC investigation into the close ties between Apple and Google, right? Wrong.

The FTC has released a statement commending Schmidt and Apple’s mutual decision for him to step down, but it warns that the investigation is not over yet. Here’s their exact wording:

“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,” said Bureau of Competition Director Richard Feinstein. “We will continue to investigate remaining interlocking directorates between the companies.”

So what gives? Well first of all, Schmidt is hardly the only tie between the two companies. Genentech CEO Arthur Levinson remains on the board for both Apple and Google. While his conflict is obviously not as big as Schmidt’s was, it wouldn’t be all that surprising to see Levinson leave one of those board seats now that Google and Apple have businesses that are increasingly overlapping.

Also interesting is the tie between former Vice President Al Gore with Apple and Google. While he resides on Apple’s board, he also serves as a senior advisor to Google. And he’s a partner at Kleiner Perkins which has ties to both Apple and Google.

And that’s just the overlap in people. What this really boils down to is what, if anything, the two companies are doing with regards to their products to be anti-competitive.

There has been no shortage of talk and speculation that Apple and Google have worked together behind the scenes on some key deals. One of those was multi-touch support in the Android operating system. Google has so far not included it in Android, and it was supposedly done because of an agreement with Apple.

Also, Google recently revealed that it had made a Google Latitude app for Apple’s iPhone, but that it instead turned it into a web app at Apple’s behest. The reason was that Apple said it too closely resembled its own Maps application — which Google also helped create.

And now we have the whole Google Voice situation. Apple rejected the Google Voice app and removed all the related apps that it had previously accepted. And things get even more complicated when you consider that while AT&T is issuing what appear to be non-denial denials. A few sites, including this one, have heard that AT&T played a role in that. The FCC is looking into the matter separately from the FTC, but obviously, it’s at least somewhat related.

So what’s the fallout from this continued investigation? Probably not too much. As we said, Levinson may have to choose a side and step down from one board. But it seems like if that happens, Gore could be safe, since he’s not technically a part of the “interlocking directorates,” as the FTC puts it.

And as we wrote back in May when the FTC first launched this investigation, Schmidt was probably safe at the time, and it was more of a warning shot. And given his statement about having no plans to leave Apple’s board a few days later, he clearly thought so too. But then Chrome OS happened, and that changed everything. Schmidt was already excusing himself from the part of Apple meetings where they discussed the iPhone (because of Google Android), and now he would have likely had to do the same with OS X (because of Chrome OS). That’s what Apple CEO Steve Jobs more or less said in his statement this morning.

But it seems like it’s this Google Voice business that really pushed the situation over the top. Not only was the FTC looking into the relationship between the companies, but now the FCC is. The fact that the FCC investigation was launched on Friday and this news comes to following Monday, seems to say a lot. Schmidt was always going to have to leave Apple’s board because of Chrome OS, but that is still months away. The FCC investigation seems to accelerate the departure process.

The main goal of the FTC investigation was obviously Schmidt, which is why it released the statement today. But unless they find evidence of collusion in continuing the investigation, its part of this should conclude. But the FCC investigation will remain a very interesting one to watch.

[photo: flickr/TheAlieness GiselaGiardino]

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