Apple 2.0

Covering the business that Steve Jobs built

Google's anti-poaching smoking gun

August 8, 2009: 7:02 AM ET

google_apple_logoBack in June, before the ties that bound the two companies unraveled and Google's (GOOG) Eric Schmidt resigned from Apple's (AAPL) board of directors, the New York Times reported that the U.S. Department of Justice had begun an antitrust investigation into the two companies' hiring practices.

The issue was whether Apple and Google had made an anti-poaching deal -- an agreement not to go fishing each others' talent pool -- that could be considered a collusive restraint on trade.

The Times had obtained an e-mail from a Google recruiter that was very suggestive. It asked one job candidate to reach out to another potential candidate.

"It is a bit touchy since he works for Apple," the recruiter wrote, adding that Google had "a nonsolicit agreement with them."

But the authenticity of the e-mail could not be verified and the recruiter, who has since left Google, said she didn't recall sending it.

Now we have what looks like a smoking gun.

It comes from TechCrunch's MG Siegler, who published an item Friday speculating that any deal they had may be off now that Schmidt has left the board.

After Siegler posted the piece, a source forwarded him the following e-mail, which Siegler has stripped of identifying details:

From: XXXXX XXXXX <XXXXX@google.com>
Date: XXXXXXX XX, 2008 X:XX:XX AM PDT
Subject: Re: Google Opportunities- Follow up email…

Thanks for getting back to me.  I don't believe that we have been in
contact previously - apologies if I am wrong about this.

From your reference to the [APPLE DIVISION], I take it that you are
currently working there.  If this is the case, we will not be able to
proceed with your application.  Google has an agreement with Apple
that we will not cold call their staff.  If you are not currently
working at Apple and are interested in learning more about [A GOOGLE DIVISION]
please let me know and I would be happy to chat with you.

Thank you again for returning my email.

The e-mail not only states explicitly that Apple and Google had such an arrangement, but it spells out the rules: an Apple employee could call Google looking for employment, but Google couldn't initiate the call.

According to Gary Reback, a lawyer who helped persuade the Justice Department to pursue its 1998 antitrust case against Microsoft (MSFT), companies are generally free to choose not to recruit from their business partners. But a written agreement between two firms to steer clear of each others' employees could raise questions.

"It is not the off-limits part that I suspect they are looking into," Mr. Reback told the Times back in June. "I suspect they think there is a quid pro quo of some kind. Antitrust counselors would advise clients not to do this kind of thing."

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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