The US Federal Trade Commission is launching an inquiry into whether Apple and Google violated antitrust laws by sharing two directors, the New York Times reports.
Google CEO Eric Schmidt and former Genentech chief executive Arthur Levinson serve on both boards of directors. Under US antitrust laws, one person can't serve on the board of two rival companies if reduced competition would result.
That wouldn't have been a problem in the search engine days, but with Google's Android operating system powering mobile phones and possibly netbooks, the company appears to share some common ground with Apple. Google's Chrome and Apple's Safari Web browsers also compete.
The Times cites experts who say the provision regarding "interlocking directorates" is rarely enforced, but anonymous sources say both companies have been notified of the FTC's inquiry. Google has previously said that Schmidt recuses himself from Apple board meetings when discussion of the iPhone comes up.
If the Times' report is accurate, the inquiry could get tricky because the two companies also cooperate on some fronts. For example, Google worked with Apple to design early versions of Gmail, Google Maps and other apps for the iPhone. In turn, the smartphone is funneling large amounts of traffic to Google services.
With that in mind, this probably won't be the last time Google comes under scrutiny, and it isn't the first, as the justice department launched its own inquiry related to Google Books last week. The company has its hands in so much of the Internet, particularly advertising and search engines, that allegations of a monopoly are bound to come up. In fact, President Barack Obama's pick for antitrust chief had previously identified Google as potentially problematic.
Interestingly enough, antitrust expert and Harvard University law professor Andrew Gavil told the Times that regulators won't see the companies' competition with Mircosoft as a problem, even if they discuss strategy.
