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FTC Examines Apple-Google Board Ties

The New York Times reports this week that the FTC [Federal Trade Commission] has begun an examination of "interlocking directorates" between the two technology giants Apple and Google for possible violations of the Clayton Antitrust Act of 1914. The Clayton Act prohibits individuals from concurrently holding memberships on the board of rival companies if their presence would serve to reduce competition between the companies in the same markets.

Apple and Google share two board members with Google. Arthur Levinson, former CEO of Genentech and Eric E. Schmidt, CEO of Google concurrently sit on the board of both companies. Apple and Google compete in the cell phone and computer operating systems markets.

Experts in antitrust law and regulation say that interlocking directorates are generally examined when the appearance of competitive conflict requires, but that such examinations rarely lead to official action. Typically if the regulators find that conflict can be established the individuals usually choose to resign from one or the other boards on which they hold membership.

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