* Levinson is also an Apple board member
* Resignation comes soon after Google CEO quit Apple board
* FTC Chairman commends Google, Apple and Levinson
* Praises parties for willingness to resolve FTC concerns
(Adds attorney comment, background)
By Alexei Oreskovic
SAN FRANCISCO, Oct 12 Google Inc (GOOG.O) said
on Monday that Arthur Levinson has resigned from its board in a
move that appears to defuse regulatory scrutiny into the ties
between the boards of Google and Apple Inc (AAPL.O).
U.S. Federal Trade Commission Chairman Jon Leibowitz
praised the move in a statement, commending the companies and
Levinson "for their willingness to resolve our concerns without
the need for litigation."
The resignation by former Genentech CEO Levinson, an Apple
director since 2000 and a Google board member since 2004, comes
about two months after Google Chief Executive Officer Eric
Schmidt quit the board of Apple.
The FTC has been looking into whether the so-called
"interlocking directorates" between Google and Apple raise
Google, whose Internet search engine had a 64.6 percent
share of the U.S. market in August according to comScore, is
facing increasing scrutiny from regulators.
Last month, the Justice Department urged the court to
reject a settlement between Google and the Authors Guild and
Association of American Publishers that would allow Google to
create a massive, online digital library. Google and the author
and publisher groups are currently working to modify the deal.
Phillip Zane, an antitrust expert with the law firm Baker
Donelson Bearman Caldwell & Berkowitz PC, said he would expect
Levinson's resignation to end the FTC investigation. "As a
technical matter, if a board member resigns it does not moot
the lawsuit," said Zane. "But as a practical matter, that's the
essence of the violation."
Google and Apple, long seen as allies against Microsoft
Corp's (MSFT.O) tech dominance, increasingly find themselves
competing on a number of fronts: Google's Android smartphone
software and its forthcoming Chrome operating system for PCs
compete directly with Apple's iPhone and its Mac operating
system, respectively. [ID:nN06438518]
The two companies are also involved in a high-profile spat
regarding Google software that allows consumers to make
low-priced international calls. Google has said that Apple
rejected the Google Voice application for the iPhone, while
Apple has maintained that it is still studying the software.
The dispute has drawn the attention of the U.S. Federal
Apple cited the increasing competition and conflicts of
interest at the time of Schmidt's resignation in August,
stating that Schmidt's effectiveness would otherwise be
"greatly diminished" because he would need to recuse himself
from larger portions of Apple board meetings.
Google's announcement of Levinson's resignation on Monday
did not provide a reason for the move, which it said is
Google spokesman Matt Furman would not comment on the
reason for Levinson's departure or on the status of the FTC
inquiry. He said that Google has nothing to announce regarding
the future size and composition of its board following
One remaining link between the two companies is
former U.S. Vice President Al Gore, an Apple board member who
also serves as a Google "adviser." Furman said the company had
nothing to announce regarding Gore's role at Google.
Google's Schmidt said at a conference in Washington earlier
this month that he believed Levinson should remain on Google's
board, noting that Google and Apple easily passed an antitrust
test for overlapping board members relating to revenue
Schmidt also said at the time that he did not step down
from Apple's board under pressure.
"Art has been a key part of Google's success these past
five years, offering unvarnished advice and vital counsel on
every big issue and opportunity Google has faced," Schmidt said
in a statement on Monday. "Though he leaves as a member of our
Board, Art will always have a special place at Google."
In afternoon trading, Google shares were up 1.4 percent to
$523.30 and Apple shares were off 0.1 percent at $190.27.
(Additional reporting by Diane Bartz and Franklin Paul;
Editing by Lisa Von Ahn and Gerald E. McCormick)