Apple said Monday morning that Google's chief executive, Eric Schmidt, is resigning from its board, a move that comes as federal regulators have stepped up scrutiny of the competitive practices of high-tech firms including Apple, the Silicon Valley iconic creator of the iPod and iPhone.
The Federal Trade Commission is reviewing the board ties between Google and Apple, which compete in mobile and computer operating systems. The Federal Communications Commission last Friday sent lettersto Apple and its partner AT&T, asking the companies to explain why they removed Google's voice service from the iPhone, a move consumer groups said prevents competition for voice services over mobile phones.
The Obama administration has promised to ramp up enforcement of anticompetitive practices, particularly in the high-tech and telecommunications industries that have become a vital part of the overall economy. Over the past several years, the wireless and telecommunications industry greatly consolidated through mergers, and the FCC is reviewing the overall competitiveness of the wireless sector to determine whether practices such as exclusive contracts between cellphone makers and wireless service operators -- such as the partnership between Apple and AT&T -- unfairly push out smaller competitors who can't strike similar deals and lead to fewer choices for consumers.
Schmidt has served on Apple's board since August 2006, and has recused himself from discussions where the two companies have overlapping businesses, such as mobile and computer operating system software, the companies have said.
In a press release, Apple chief executive Steve Jobs said Schmidt has been an "excellent board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful."
But Jobs said the companies are becoming greater competitors as Google enters more of Apple's "core businesses." Google's Android mobile operating system competes with Apple's iPhone software platform and Google's Chrome OS competes with Apple's operating system for laptop and desktop computers.
"Eric's effectiveness as an Apple board member will be significantly diminished since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest," Jobs said in the release. "Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple's Board."
The Federal Trade Commission earlier this year launched an investigation into potential antitrust violations between the ties of Google's and Apple's boards as Schmidt and Arthur Levinson, the former chief executive of a biotech firm sat on both boards of directors.
In May, Schmidt told reporters he would not resign from Apple's board, saying he didn't believe the two companies were core competitors. Google's main business is Internet search and advertising, which Apple doesn't do. Google faces another antitrust investigation by the Justice Department of its settlement with book authors and publishers that would give Google access to millions of digital titles.
"I have very much enjoyed my time on the Apple Board," Schmidt said in a statement. "It's a fantastic company. But as Apple explained today, we've agreed it makes sense for me to step down now."
posted by Anonymous at
12:48 AM Wednesday, August 5, 2009
