Levinson Leaves Google Board, Resolving FTC Probe
Tuesday, October 13, 2009
Google said Monday that Arthur D. Levinson was stepping down from its board, following a probe by the Federal Trade Commission into the overlapping membership of directors at Google and Apple.
Levinson, a former chief executive of biotechnology firm Genentech, had served on Google's board for five years. He also holds a seat on Apple's board and remains a member there.
His departure follows the resignation in August of Google chief executive Eric Schmidt from the Apple board.
In a statement, FTC Chairman Jon Leibowitz commended the companies and Levinson "for their willingness to resolve our concerns without the need for litigation."
Allowing directors to serve on boards of companies that directly compete against each other is a violation of the Clayton Antitrust Act, legal experts said. The FTC's investigation was being closely followed because the agency was looking at a competitive relationship that may not be strong now but could increase quickly with the rapidly changing landscape in the technology industry.
Google has contended that its primary business -- online search -- does not directly compete with Apple's main focus as a maker of computers and iPods.
But while they may not be big competitors now, the two firms are jockeying for position in the booming mobile-phone market, legal experts said. They both offer operating systems for handhelds and other mobile devices as well as mobile-phone voice and map applications, and mobile browsers to surf the Web.
"This may be the FTC saying that while there might not presently be overlap in competition, we think there is a serious future competitive problem and we can identify and describe it; we shouldn't be hobbled in saying this could be a huge problem," said Bruce Hoffman, head of the Hunton & Williams global competition practice.
Apple chief executive Steve Jobs acknowledged as much in August in a statement on Schmidt's resignation. He said the decision was mutual and made sense because Schmidt's effectiveness on the board, which he had served on for three years, "will be significantly diminished since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest."
Google didn't give an explanation for Levinson's departure, which was effective immediately. Apple directors Al Gore and Bill Campbell remain advisers to Google.
"Art has been a key part of Google's success these past five years, offering unvarnished advice and vital counsel on every big issue and opportunity Google has faced," Schmidt said in a release.
The competition between Apple and Google signals an increasingly tense relationship for the long-time allies. Recently, the Federal Communications Commission began a probe of Apple's decision to block Google Voice, a call-routing and messaging service, from the iPhone.
There has also been growing federal scrutiny of Google, which is being probed by multiple agencies as it moves beyond search into news, digital books and communications services. On Friday, the FCC began a review of Google's decision not to complete certain calls to rural areas as part of Google Voice service. AT&T says the practice violates telecom laws. The FCC probe will look into whether Google Voice is a traditional phone service and should be regulated as such.