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Concerns remain after Google-Apple board resignation

Google CEO leaves Apple board to avoid conflicts.

John Scully (L), former Apple CEO, and Eric Schmidt, CEO of Google, talk during lunch at the Sun Valley Inn in Sun Valley, Idaho July 10, 2009. The resort is the site for the annual Allen & Co's media and technology conference.

Rick Wilking/Reuters

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Google Inc. Chief Executive Eric Schmidt has resigned from Apple Inc.’s board because of the companies’ conflicting interests as competition between the one-time allies heats up.

The split announced Monday comes just a few weeks after Google unveiled plans for a personal computer operating system that could siphon sales from Apple’s Mac line and just a few days after the Federal Communications Commission contacted the companies about Apple’s decision to block a Google application from its popular iPhones.

Regulators from the Federal Trade Commission had already been looking into whether Schmidt’s dual role on the boards of Google and Apple would make it easier for the technology trailblazers to collude in ways that would diminish competition.

Thorny questions about corporate governance could remain, even though Apple and Schmidt mutually agreed to sever their ties. That’s because another Google director, Genentech Inc. Chairman Arthur Levinson, remains on Apple’s board.

Schmidt, 54, has repeatedly assured reporters that his involvement with the two companies wasn’t a problem because he recused himself from Apple’s board discussion about the iPhone, which competes with mobile phones equipped with an operating system made by Google. He remained confident he would be able to stay on Apple’s board even after Google last month set out to develop a separate operating system for inexpensive, portable computers, potentially competing with Apple’s Macs.


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