Apple and Google Ties Investigated

The Federal Trade Commission has begun an inquiry into whether the close ties between the boards of two of technology’s most prominent companies, Apple and Google, amount to a violation of antitrust laws, according to several people briefed on the inquiry.

Apple and Google share two directors, Eric E. Schmidt, chief executive of Google, and Arthur Levinson, former chief executive of Genentech. The Clayton Antitrust Act of 1914 prohibits a person’s presence on the board of two rival companies when it would reduce competition between them. The two companies increasingly compete in the cellphone and operating systems markets.

Antitrust experts say the provision against “interlocking directorates,” known as Section 8 of the act, is rarely enforced. Nevertheless, the agency has already notified Google and Apple of its interest in the matter, according to the people briefed on the inquiry, who agreed to speak on condition of anonymity because the inquiry was confidential.

F.T.C. officials declined to comment. Spokespeople for Apple and Google also declined to comment. A spokesman for Genentech declined to make Mr. Levinson available for comment.

The inquiry, which appears to be in its early stages, is the second antitrust examination involving Google to have surfaced in recent days. It suggests that despite the company’s closeness to the Obama administration, Google will not escape scrutiny from regulators.

Mr. Schmidt campaigned for then-Senator Barack Obama during his presidential campaign and advised the transition team and the administration on various matters. He was recently appointed to President Obama’s advisory council on science and technology.

Christine A. Varney, who was recently confirmed as the head of the antitrust division of the Justice Department, last year singled out Google as a probable source of future antitrust concerns because of its near monopoly on Internet search and advertising.

Some antitrust experts said they did not expect Google’s ties to the administration to play a role in antitrust issues.

“I expect the administration to be aggressive, generally, on antitrust enforcement,” said Sanford Litvack, a partner at Hogan & Hartson. Last year, while working for the Justice Department, Mr. Litvack built a case to block a prominent advertising partnership between Google and Yahoo. “I don’t expect Google to either be singled out or to receive a free pass because of Schmidt’s relationship with the administration,” he said.

Antitrust experts say that investigations of interlocking directorates rarely lead to major confrontations between companies and the government. Executives typically choose to resign from the board of a competitor if it poses a problem rather than face a lengthy investigation or a bruising legal fight.

Like many companies in the technology industry, Google and Apple are both allies and competitors. Google, for instance, worked with Apple to design early versions of some its services, like Gmail and Google Maps, for Apple’s iPhone.

But the areas in which the companies are bumping up against each other as rivals have been increasing.

Mobile phones, in particular, loom large in the future of both Google and Apple. Much of Apple’s fortunes these days are tied to the success of the iPhone. Google, for its part, has said repeatedly that one of its biggest strategic opportunities is to expand its online advertising empire into mobile phones.

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