Last week, the FTC began “discussing” whether or not the close ties between Apple and Google might run afoul of anti-trust laws contained in Section 8 of the Clayton Antitrust Act. The reason for the concern was rooted in the fact that two of Apple’s board members, Google CEO Eric Schmidt and former Genentech CEO Arthur Levinson, are also board members over at Google.
While there’s nothing wrong with an individual serving as a board member for two different companies, things start to get fishy when those two companies are direct competitors, and the opportunity for collusion increases.
Schmidt, however, sees nothing wrong with his dual-role and has no intentions of stepping down.
From my perspective, I don’t think Google sees Apple as a primary competitor.
Jim Goldman over at CNBC, however, was a little peeved at Schmidt’s apparent nonchalance regarding the matter and argues that Apple shareholders deserve better:
But Apple shareholders deserve engaged board members singularly focused on the company’s business at hand. Schmidt himself now admits he recuses himself from iPhone discussions. Soon, he’ll have to do the same with Mac discussions when Android gets loaded into netbooks. The same might happen with Levinson. Brilliant guys both, but Apple investors deserve — and should expect — board members to serve their board full time, not part time.
On first glance, it makes sense. Apple board members should serve the board full time. But, that’s not what board members of a larger corporation do.
DaringFireball astutely points out:
None of Apple’s board members, other than Steve Jobs, work full-time for Apple. Goldman knows that. Board members don’t work on products or even product ideas. Goldman knows that, too.
So I just don’t get it. Seems to me that this board has represented shareholder interests well, and that Apple’s alliances with Google are in its interest.
Checkmate. Here’s a quick rundown of Apple’s board members and what they do.
Chairman and former CEO – Intuit Corp
Chairman and CEO – J.Crew
Albert Gore Jr.
Former Vice President of the United States
Chairman and CEO, Avon Products
Arthur D. Levinson, Ph. D.
Chairman and CEO – Genentech
Dr. Eric Schmidt
CEO – Google
Chairman, President and CEO – Harwinton Capital