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Today's Times reports that the FTC under Obama will be going after Google and Apple's interlocking boards under an anti-trust provision that hasn't been much enforced.
Hate to say it, but I predicted as much in my previous gig.
Thing is, this could signal a tougher approach to a whole range of activities, including strategic alliances, as I reported the new chairman of the DoJ's anti-trust division, Christine Varney, threatened to do when she served on the FTC under Clinton.
Comments (3)
1. 05-05-2009 11:28
It seems like this is a matter of questionable corporate governance as opposed to anti-competitive behavior. The iPhone and G1 are two distinct products that will thrive or idle based on how well they differentiate themselves, not only from each other but the myriad of other options. Tipping one's hand on their next move to a competitor would only hurt them.
Also, it's very diplomatic for Google to say Schmidt recuses himself when Apple discusses mobile phones. One would think Apple gives him the boot on those discussions.
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2. 05-05-2009 16:09
Your reaction about anti-competitive behaviour was mine as well. A lawyer I just talked to for the story I'm working on explains that the law as written just assumes that interlocking boards are anti-competitive because it was written during an era when they were widely used for price collusion and the like (think early 20th century and Standard Oil). But that's why this provision has been rarely enforced of late. And the point about the actual behaviour has indeed been embraced by the courts. That suggests, ss this lawyer put it, that the FTC is either betting these guys don't want to go to court or that it can somehow change a court's mind. Either way, he adds, it shows how aggressive Obama's anti-trust team is shaping up to be.
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3. 05-05-2009 16:33
If we were talking about a commoditized, relatively concentrated business like oil in the early 20th century, I could understand the concern. But that's clearly not the case. If Google and Apple forged a venture to put out a phone together, the FTC wouldn't step in there, would it? Heck, the entire smartphone business only accounted for 23% of all handset sales in the first quarter