Japanese Fair Trade Commission sees Yahoo-Google deal as acceptable...for now

This week, Yahoo Japan announced it reached a deal with competitor Google to utilize its search engine technology and advertising and distribution platform while retaining its current appearance. Despite protests from Microsoft, Japanese fair trade organizations today said the deal does not appear to create monopolistic conditions.

Historically, Yahoo and Google have dominated the Japanese search market, and Tuesday, Microsoft Vice President and Deputy General Counsel Dave Heiner said the deal would create a search monopoly for Google.

"Today Google accounts for about 51% of paid search advertising in Japan. Yahoo Japan accounts for 47%. Their combined share of natural search results is almost as high," Heiner said. "If Google is permitted to proceed with its plan, it would gain nearly complete control over search and search advertising in Japan through contract, not organic growth. Google alone would decide what consumers in Japan will find, or not find, on the Web. And Google will obtain massive amounts of data regarding the search history and Web sites visited by every consumer, business and government agency that conducts Web searches."

Wednesday, Secretary General of the Japanese Fair Trade Commission Takahide Matsuyama said Yahoo had consulted the Commission before making the announcement, and the deal "would not immediately cause any problems related to antitrust regulations," because the two businesses would remain separate.

However, Matsuyama continued, "Changing market conditions and the changing competitive atmosphere could, of course, change the decision."