Google CEO Schmidt Steps Down from Apple Board

It was only a matter of time, but Google CEO Eric Schmidt has resigned from Apple’s board of directors.

Schmidt, who joined Google in 2001, has served Apple’s board since August 2006.

A statement from Apple fully acknowledges that the two companies are increasingly competing in the same spaces, particularly with Google’s Android-powered phones and upcoming Chrome OS taking on the iPhone and Macs, respectively.

“Unfortunately, as Google enters more of Apple’s core businesses . . . Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest,” Apple Chief Executive Steve Jobs said. “Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board.”

The U.S. government was reportedly on the way to reaching a similar conclusion. In May, a New York Times story said the Federal Trade Commission was investigating the shared members between Apple’s and Google’s boards as a potential violation of the Clayton Antitrust Act of 1914. Schmidt said at the time that he doubted the government would find anything wrong about the situation. Earlier this month, Reuters reported that Schmidt was thinking of leaving.

In addition to Schmidt, former Genetech CEO Arthur Levinson serves on both boards. The announcement by Apple makes no mention of Levinson.

Apple’s also taking heat for blocking Google Voice apps from the iPhone’s App Store. The FTC was quick to act there, investigating the situation just days after the event. That issue is more about Apple’s store policies than any relationship with Google, but the drama illustrates how the two companies are increasingly at odds, and how it’s landing on the radar of regulators.

It’s hard to imagine many situations in which Schmidt wouldn’t recuse himself during an Apple board meeting. In addition to competing on handset and computer operating systems, the companies also butt heads on applications such as Web browsers (Chrome and Safari), productivity software (iWork vs. Google Docs and other apps) and video services (YouTube and iTunes), among others. Regardless of whether the shared board members violates the law, Apple is better served with a board member who can actually participate.

With Apple and Google pushing away from each other, the question now is whether we’ll see more bad blood between the two companies. Google has recently begun sniping at Microsoft in an ad campaign. Apple could be next.