When Google CEO Eric Schmidt joined Apple's board of directors in August 2006, technology fans expected the companies to meld Apple hardware and software with Google's expanding set of Internet-based applications.
So far, the geeks have been disappointed. Google is the default search engine on Apple's Safari browser, but that's also true of the much more widely used Firefox. Apple's iPhone doesn't use Google's Android operating system. Nor has Apple done anything special to support Google's Web-based applications such as Gmail and Google Docs. The iPhone includes a player for Google's YouTube video site, but Apple pushes its own iTunes audio and video downloads.
If Schmidt and former Genentech CEO Arthur Levinson have somehow tried to use their dual board seats in some behind-the-scenes way to block competitors -- Micrososft, Yahoo, AOL, the entire print publishing industry -- it isn't working.
Still, the Federal Trade Commission, according to a Wall Street Journal report, is investigating whether the pair's presence on both boards could reduce competition.
This isn't really about Apple. It's about Google, the singularly successful Internet company which has now been hit by three federal investigations in the past year. First the Department of Justice threatened to block the company's potential search-ad deal with Yahoo. Then DOJ investigators scrutinized Google's settlement with the Association of American Publishers and the Authors Guild over the company's plan to scan and search a large number of copyrighted books.
Neither company will comment on the situation. The Journal's analysis expresses bewilderment:
Why the FTC is taking up the issue now remains unclear. But one possibility is that Google and Apple, which long dominated separate sectors, are competing in more areas.
The Obama administration has suggested it will take a harder line on antitrust regulation than the Bush Administration.
Investigations of large tech companies always raise the ghost of the United States v. Microsoft, The Department of Justice's 1998 set of consolidated civil actions. Microsoft's settlement required the company to publish its application programming interfaces, so that other companies' applications could work with Windows as well as Microsoft's own apps. The settlement was nowhere near Justice's goals, which were said to include breaking up Microsoft, as the DOJ had done to AT&T.
But are Microsoft in 1998 and Google in 2009 comparable situations? In 1998, Microsoft's hyper-aggressive attempt to kill Netscape was obvious. To undercut Netscape, Microsoft gave its Internet Explorer browser away for free. The company created ActiveX technology for websites that would only run on a combination of the Windows operating system and Internet Explorer browser. Microsoft courted and compensated a range of big-name content producers, including Disney and CNet, to create content that only played in Internet Explorer.
By contrast, a YouTube player for iPhones seems like a consumer-demand-driven product. If there are specific actions that Schmidt and Levinson have taken to hamper competition, the DOJ hasn't yet explained them. It's possible the investigation is a fishing expedition: Google's really huge and successful, so surely there must be something for which to sue them.