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Google CEO Quits Apple Board

Google CEO Eric Schmidt resigned from Apple's board of directors Monday as the companies increasingly compete and federal regulators examine ties between the tech giants.

The Federal Trade Commission on Monday said it is looking into whether Google's business ties with Apple might hinder competition.

"We have been investigating the Google-Apple interlocking directorates issue for some time and commend them for recognizing that sharing directors raises competitive issues," says Richard Feinstein, the FTC's bureau of competition director.

"We will continue to investigate remaining interlocking directorates."

Apple's current board includes former vice president Al Gore, Avon Products CEO Andrea Jung and Genentech Chairman Arthur D. Levinson, who also serves on Google's board. Levinson declined to comment on his dual roles.

Apple said Schmidt, who joined its board in August 2006, would have had to repeatedly recuse himself from board meetings to avoid potential conflicts of interest.

Google's Android operating system is used in mobile devices that compete with Apple's iPhone. Google is also developing a free operating system based on its Web browser, Chrome, that could rival the Macintosh OS.

"Unfortunately, as Google enters more of Apple's core businesses, with Android and now Chrome OS, Eric's effectiveness as an Apple board member will be significantly diminished," Apple CEO Steve Jobs said in a statement Monday.

"I have very much enjoyed my time on the Apple board," Schmidt said in a statement. "It's a fantastic company. But as Apple explained today, we've agreed it makes sense for me to step down now."

Apple did not say when it would name a replacement to its seven-member board. Shares of Google rose 2%, to $452.21 in trading Monday. Apple shares improved nearly 2%, to $166.43.

Schmidt's departure also underscores recent fissures in relations between the two companies.

Last week, the Federal Communications Commission sent letters to Apple, Google and AT&T, Apple's iPhone partner in the U.S., seeking information on Apple's rejection of Google Voice's application for the iPhone.

Google Voice assigns a unique phone number to each user and lets the user direct calls to that number to any other phone line.

"Questions have increased the past year as the companies have drifted into competitive spaces," says Gene Munster, senior research analyst at Piper Jaffray. "The FCC and FTC actions further sharpened the focus."

When asked in May if he would consider stepping down as an Apple director, Schmidt said he didn't view Apple as a "primary competitor."

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