Print 19 comment(s) - last by icrf.. on May 11 at 9:46 PM

The Federal Trade Commission is investigating Google CEO Eric Schmidt's potentially improper relationship with Apple, a competitor in the cell phone business. Eric Schmidt, refuses to resign from his directorship at Apple, a company which he has expressed great fondness for.  (Source: Gawker)
Eric Schmidt plans to stand his ground

Google chief executive Eric Schmidt is under investigation by the Federal Trade Commission for his potentially improper relationship with electronics giant Apple.  The FTC believes that Mr. Schmidt's directorships at the two companies, which compete in at least one sector, cell phones, may constitute a breach of antitrust laws.  However, despite the government pressure, Mr. Schmidt refuses to give up his relationship with Apple.

Eric Schmidt invested heavily in Apple over the last decade and on August 28, 2006 he was awarded with a position on Apple's board of directors.  Mr. Schmidt described his love for Apple, stating, "Apple is one of the companies in the world that I most admire. I'm really looking forward to working with Steve and Apple’s board to help with all of the amazing things Apple is doing."

Apple founder and CEO Steve Jobs returned the love, stating, "Eric is obviously doing a terrific job as CEO of Google, and we look forward to his contributions as a member of Apple’s board of directors.  Like Apple, Google is very focused on innovation and we think Eric’s insights and experience will be very valuable in helping to guide Apple in the years ahead."

Over the last few years, as a director at Apple, he has been responsible in part for designating broad policies and objectives, approving budgets, and completing other financial management.  Despite the jeopardy that Mr. Schmidt is currently in, he is fighting to retain his position.

He spoke to reporters at Google's Mountain View Headquarters in California, insisting that the relationship was on level, stating, "If there are issues on competitiveness, I recuse myself.  From my perspective I don't think Google sees Apple as a primary competitor."

When asked if he might quit Apple, he stated "it hasn't crossed my mind."

Also under investigation is Arthur Levinson, former CEO of Genetech, who also serves on both boards.  Google's legal counsel Kent Walker believes that tie is legal, stating, "The law is clear that there is a safe harbour under the Clayton Act for companies that don't have overlapping revenue in different areas, and we're comfortable with that position."

Some shareholders are angry with Mr. Schmidt’s relationship with Apple, though.  Brandon Rees, a representative of a group of major shareholders, states, "There is nothing to gain and a lot to lose. We don't want Google to become an antitrust devil like Microsoft did."

If Mr. Schmidt is found in violation of antitrust laws it would be a major blow for Google.  He would likely have to pick between his two worlds -- his life with Google, and his love for Apple. 

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

I got rated down for saying this exact thing.
By foolsgambit11 on 5/10/2009 5:27:59 PM , Rating: 4
There is nothing to gain and a lot to lose.
In the previous article about this, I pointed the same thing out - it is important to avoid the appearance of impropriety. If obviously doesn't benefit Google to have Schmidt on Apple's board (if it did, then there would definitely be something improper going on), and it opens the company up criticism (founded or not).

On the other hand, the fact that Google went into phones at all suggests that Schmidt's association with both companies isn't keeping them from competing at some level. And this article does go into some of the benefits that Apple gets from having him on the board. But what does Google get out of having Schmidt on Apple's board? Doesn't Schmidt have enough to do at Google to keep him busy?

But still, Google could have prevented this investigation by not allowing him to be on both boards. And it is undoubtedly better for the company not to have to worry about a legal investigation.

By foolsgambit11 on 5/11/2009 11:15:56 AM , Rating: 2
It's an effing subject line. Get over it.

Do you have anything constructive to add, or are you just trying to deflect the subject away from discussing good business practices?

By Alexstarfire on 5/11/2009 9:42:06 AM , Rating: 2
I don't know if he has enough to keep him busy or not as I do not run his life, but you can't stop the flow of ideas. Now if he is on Apple's board helping them with business decisions then I would agree with you and say that it makes little sense for him to be on both boards, but if he is part of the creative process in both companies then I don't see a problem. People at Apple could ask him questions that those at Google don't and as such he comes up with something that he never would have even dreamed of if he only worked at Google.

But that is just speculation at best.

By foolsgambit11 on 5/11/2009 11:18:26 AM , Rating: 2
That does make some sense. And I can see Google feeling that the intangible benefits of their CEO expanding his creative horizon outweighed the risk of legal difficulties from his position at Apple. That's how they do business.

"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki