Schmidt does not take part in Apple board discussions concerning the iPhone due to a possible conflict of interest between Apple and Google, as the latter produces the Android operating system for smartphones and (soon) netbooks.
Kent Walker, an attorney for Google, has confirmed that the FTC is talking to the company about the overlapping directorships.
Google's position is that there is no overlapping revenue between the two companies, and therefore competition cannot be reduced by having directors in common.
For example, both companies produce web browsers for the Windows operating system (Chrome from Google and Safari from Apple), but neither company charges for the software.
And although both create an operating system for mobile phones, Android is open source and can be used by any phone vendor without payment.