Apple, Google Governance Continues Cracking

(MoneyWatch)  Looks like ex-Genentech CEO Arthur Levinson has resigned from the board of Google. In some cases that might be enough to get the Federal Trade Commission spotlight off Google and Apple having shared two directors while competitors, but even if this particularly issue goes away, plenty is left on the regulatory front to be a concern for management of either company.

The problem is that both Apple and Google have been under the spotlight for too long and from too many agencies. This particular issue was about consumer interests and the government's desire to see competition among rivals. That simply wasn't happening with Google and Apple. Having two common directors who should have had to recuse themselves on areas in which the companies competed -- you know, little businesses like smartphones, media services, mobile computing, and telecommunications services, to name a few -- would seem to suggest that they'd be able to ethically vote on about, oh, 3 percent of what a board of one of the boards would consider a year. The reaction of the FTC tells how close the companies were to continued major trouble:

In a statement, FTC Chairman Jon Leibowitz indicated his agency was prepared to sue Google and Apple if they hadn't purged their boards of the potential conflicts of interests."Google, Apple, and Mr. Levinson should be commended for recognizing that overlapping board members between competing companies raise serious antitrust issues and for their willingness to resolve our concerns without the need for litigation," Leibowitz said.

It certainly sounds as though the resolution was the result of a backroom deal trading Levinson's resignation from Google's board for the FTC to find other companies to investigate.

And, indeed, things may have cooled off from that respect. But the heat is nowhere near off if you consider the entirety of the problems that have been facing both companies. There's still an investigation by the FCC over Apple turning thumbs down to Google Voice. Multiple countries are pressing Apple over hardware with severe heating problems. And Apple, among others, is attracting attention for no employee poaching pacts with other tech companies. The FCC, at AT&T's behest, is looking into whether Google has met federal requirements in blocking the access of Google Voice to some rural communities because of the cost. And Google still off the hook in terms of consumer privacy concerns.

All that severing ties between the boards of the two companies is really likely to do is allow each to think independent how to deal with the legal challenges without having to be shackled to a co-subject-of-interest.

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