No one can deny they’ve been chummy. Google (s goog) and Apple (s aapl) skip about Silicon Valley, hand-in-hand, developing new tech together that is perfectly suited for the Apple hardware it makes its way onto, despite having competing smartphone OS platforms.
The Federal Trade Commission (FTC) has decided to step in on the little dance going on between the two major players, citing suspicion of activity that violates anti-trust regulations. Even though Google and Apple are not technically one company, their cozy relationship could represent a monopoly that is unfair for their competition.
Specifically, the FTC takes issue with the close relationship between the boards of the two companies. Both boards share two directors, which, according to U.S. legislation, is a big no-no. Despite it being a technical violation, however, it often happens that directors do sit on multiple boards, and the FTC rarely steps in, in most cases. So what’s the difference? Basically, the severity of the offense seems to be measured in success. Since Google and Apple’s team-ups pose a threat to the ability of other companies to compete, their director-sharing raises red flags at the FTC.
What’s next for the two companies if the FTC’s investigation finds that there has been wrong-doing? Well, first of all, both Eric Schmidt and Arthur Levinson will have to resign from one or both boards, and fines could follow. Right now they both deny having done anything that could be considered an antitrust violation, with Schmidt claiming that he leaves the room any time Apple’s board is going to discuss cell phone strategy — one area where the two companies are definitely in competition with one another.