Google’s Calico Could Pose a Conflict for Apple Chairman Arthur Levinson

Levinson will become CEO of Google-backed Calico while also serving as chairman of Apple's board of directors

  • Share
  • Read Later
Mike Segar / REUTERS

Silicon Valley titans Apple and Google have always had a complicated relationship. Once close allies, the two companies have adopted an increasingly hostile posture toward each other as the battle for mobile device supremacy has escalated. But as recently as 2009, Apple and Google actually shared two prominent board members, including Google’s then-CEO Eric Schmidt.

From 2006 until 2009, Schmidt, currently Google’s executive chairman, served on Apple’s board of directors, during a period when he was Google CEO and also on its board. From 2004 until 2009, Arthur Levinson, chairman of biotech giant Genentech, served on Google’s board, during a period when he was also an Apple director. It’s common for industry moguls to sit on multiple boards — especially in the sometimes insular world of Silicon Valley — but that arrangement struck federal regulators as questionable.

By May 2009, as Apple and Google began to lock horns in the mobile market, the Federal Trade Commission launched an inquiry into whether the presence of Schmidt and Levinson on the boards of both companies violated antitrust laws. Facing a federal probe, Schmidt resigned from Apple’s board in August of 2009. A few months later, Levinson resigned from Google’s board.

(MORE: Why Apple vs. Google Is the Most Important Battle in Tech)

Levinson, a biochemist with a Ph.D. from Princeton who become CEO of biotech pioneer Genentech in 1995, remained on Apple’s board of directors. Since 2011 he’s been its chairman. Given that history, the news that Levinson will become CEO of a new, Google-backed company called Calico, is bound to raise eyebrows, if not renewed attention from federal regulators in Washington. Levinson will also be a founding investor in the new company.

“There is something about this that feels uncomfortable,” says Lucy P. Marcus, CEO of Marcus Venture Consulting and an expert on corporate governance and board ethics. “If there is no direct overlap between Calico and things that Apple is working on, then technically it’s not a conflict of interest. If there is a conflict of interest, Levinson would have to step out of Apple’s boardroom during those discussions.”

In this week’s issue of TIME, Google CEO Larry Page discusses why Calico could be Google’s most audacious “moonshot” yet. Though Google’s specific plans for Calico are still in development, the new company aims to find ways to treat aging and extend human life. Google’s apparent ambition is to address the most basic facts of life: sickness and death.

“Illness and aging affect all our families,” Google CEO Larry Page wrote in a statement. “With some longer term, moonshot thinking around healthcare and biotechnology, I believe we can improve millions of lives. It’s impossible to imagine anyone better than Art — one of the leading scientists, entrepreneurs and CEOs of our generation — to take this new venture forward.”

Google co-founders Larry Page and Sergey Brin have made no secret about their intention to make bold, long-term bets in areas outside — sometimes way outside — the company’s core search, advertising and software businesses. “In some industries,” Page tells TIME in an exclusive interview for the Sept. 30 issue, “it takes ten or 20 years to go from an idea to something being real. Healthcare is certainly one of those areas…maybe if things are going to take ten or 20 years, we should shoot for the things that are really, really important, so ten or 20 years from now we have those things done.”

(MOREExclusive: Google vs. Death)

Page’s partner Brin leads the company’s experimental Google X lab, which is responsible for initiatives like Google Glass and driverless cars. Google is also venturing into renewable energy, and testing a plan to deliver Internet access to remote areas of the globe via hot air balloons. At one point, there was speculation that Google might even develop a “space elevator,” which could cheaply and efficiently deliver vehicles into space.

One of the reasons the FTC launched its 2009 investigation was that both Levinson and Schmidt served on the boards of Apple and Google at a time when the companies were beginning to square off against each other in the mobile space. Given both companies’ current interest in wearable computing, which has obvious health tech applications, Levinson’s move could set the two tech giants on a new collision course. Or, it could presage Levinson’s departure from Apple’s board. A spokesperson for the FTC declined to comment.

“I’ve devoted much of my life to science and technology, with the goal of improving human health,” said Levinson. “Larry’s focus on outsized improvements has inspired me, and I’m tremendously excited about what’s next.”

Apple CEO Tim Cook expressed support for the new project. “For too many of our friends and family, life has been cut short or the quality of their life is too often lacking,” Cook said. “Art is one of the crazy ones who thinks it doesn’t have to be this way. There is no one better suited to lead this mission and I am excited to see the results.” Apple did not immediately return a request for further comment.

“If Tim Cook endorses this, does it mean that Apple doesn’t plan to pursue biotech, health tech or life science areas?” asks Marcus. That may come as a surprise to some Apple shareholders, especially given that those fields are poised to become huge technology growth markets over the next several years. “Levinson has been on Apple’s board since 2000,” Marcus observes. “How long does he plan to remain chairman? Is this his exit strategy?” Google’s new venture may lead others to ask similar questions.