Google CEO defends his Apple board seat
With the U.S. FTC investigating the sharing of a director between Google and Apple, Google CEO Eric Schmidt has spoken out saying there is no harm in the situation.
The United States Federal Trade Commission is looking into whether Apple and Google are breaking the laws against antitrust by sharing members of their boards of directors, as we reported earlier this week. The two board members in question are Google chief executive officer Eric Schmidt and Arthur Levinson, the chairman of Genentech Inc.
Schmidt held a press conference in advance of the Google annual meeting in Mountain View yesterday during which he strongly indicated that he felt there was no problem in the arrangement, according to an AP story. The Google CEO said he does not believe that stepping down from Apple’s board is necessary because he doesn’t believe that the maker of the iPhone, iPod and computers as a “primary competitor.”
Kent Walker, an attorney for Google, confirmed that the Mountain View-based firm is in discussions with the Federal Trade Commission about whether its overlapping board relationships with Apple violates federal antitrust laws. Walker told reporters that Google is “comfortable” that it doesn’t generate enough revenue in the same markets as Apple for Schmidt’s and Levinson’s dual roles on the companies’ boards to violate antitrust law.
Google, of course, earns the vast majority of it’s revenue from search and on-line advertising. Still, Google does have a cell phone operating system, Android, which competes directly with the Apple iPhone operating system. Google also markets a Web browser, Chrome, which competes with Apple’s Safari. There is also potential for competition between the Apple App Store and an expanded YouTube.
At least one shareholder at the annual meeting felt that these points of competition could be enough to cause antitrust problems. Brandon Rees, a representative for the AFL-CIO’s holdings in Google, said, “There is no reason for it because it isn’t adding any value for shareholders. There is really nothing to gain and a lot to lose. We don’t want Google to become an antitrust devil like Microsoft did.”
Those are two widely varying points of view which will be getting wide discussion over the next month or longer at the FTC. At the worst, Schmidt and Levinson may simply be forced to resign from Apple’s board. Although probably not a critical situation for Apple, such resignations would certainly deprive Apple of two very intelligent points of view in the technology sector.
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