A tech blog focused on Silicon Valley reported over the weekend that it has proof of a “gentleman’s agreement” between Apple and Google not to poach each other’s employees.
If TechCrunch indeed has the goods, it could lead to antitrust accusations against the two companies by the federal government, which has been investigating reports of recruiting collusion for at least two months. The Washington Post first reported on June 2 that the Justice Department was studying the recruiting practices of several large tech firms. Besides Apple and Google, Yahoo and biotech company Genentech were named in the story.
Albert Foer, president of the American Antitrust Institute, was quoted saying, “This could be collusive restraint on trade, which could have a serious impact on competition.”
Now, TechCrunch says it has confirmation of the practice from former Google employees. The writer of the post, M.G. Siegler, says TechCrunch was also forwarded an email allegedly sent by a Google recruiter to a candidate that says:
“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.”
As all seasoned recruiters know, poaching — recruiting talent from others and especially from competitors — is a time-honored practice. Stealing the best talent from a competitor strengthens the hiring company while it weakens the company from whom the candidate was poached.
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Because agreements between two companies on who and who can’t be hired could limit competition, antitrust issues are raised.
As the TechCrunch post notes, Apple and Google have had a close relationship for several years. Until he resigned last week, Google CEO Eric Schmidt sat on Apple’s board of directors. In recent months that relationship became increasingly uncomfortable as Google pushed deeper into Apple’s business.
Though the world knows Google as a search and advertising company — and it is, with almost all its revenue coming from that business — in recent years it has released a number of products as it tries to diversify. Some of them, Google’s mobile device platform Android for example, are competitive with Apple’s line.
Schmidt’s resignation came only days after the Federal Communications Commission began asking why Apple refused to allow a Google voice application to be offered on its iPhone store.