Microsoft says it is challenging the Japanese Fair Trade Commission's acceptance of Yahoo Japan's search deal with Google. Google is powering Yahoo Japan's search and search ad platform, while Yahoo is switching to Microsoft Bing.
Microsoft July 30 said it planned to challenge the Japanese Fair Trade
Commission's acceptance of Yahoo Japan's
search deal with Google.
Yahoo Japan July 27 agreed to let Google power its search
and search advertising platform
despite the fact that its U.S.-based investor, Yahoo, is switching to
Microsoft's Bing's search engine and ad platform in 59 countries around the
The SoftBank subsidiary's move stunned Microsoft, which is struggling to
make inroads against Google's 65 to 70 percent search market share in the United
States and abroad. Losing Yahoo Japan,
the third largest Web market, to Google pains Microsoft.
But Yahoo Japan
President Masahiro Inoue explained in a press conference that Bing was not
strong enough for its needs, particularly regarding language localization.
Brad Smith, Microsoft's senior vice president and general counsel, compared Google's Yahoo Japan pact
to Google's bid to partner
with Yahoo in 2008, a deal that the Department of Justice struck down in November
of that year for being anti-competitive.
"The 2008 deal would have locked up 90 percent of paid search
advertising," Smith said. "This deal gives Google virtually 100
percent of all searches in Japan,
both paid and unpaid. It means there will be no search competition in Japan
and that Google will end up controlling all personal search information for all
Japanese consumers and businesses."
Google spokesperson Andrew Pederson told eWEEK that Google and Yahoo Japan's
advertisers and advertising data will remain entirely separate so as to avoid
any impropriety or claims of anti-competition.
Indeed, Smith's comments prompted the Japanese FTC to defend its decision in
a press conference July 28.
Takahide Matsuyama, secretary-general of Japan's
Fair Trade Commission, contended that the fact that Google and Yahoo Japan
are keeping their advertisers and ad data separate means there are no antitrust
"In the U.S.,
the concern was that the companies would go from advertising competitors to
collaborators," Matsuyama said
in a statement, adding that the Japanese FTC will monitor the pact for
compliance. "If they continue to compete for advertisers, the issue of
changing your search engine is not an antitrust problem."
Microsoft disagreed in a statement e-mailed to eWEEK that echoes Smith's
"We plan to present evidence to
the Japanese FTC explaining why we believe that this deal is substantially more
harmful to competition than Google's deal with Yahoo in 2008 that the U.S. Dept. of Justice found to be illegal."
Microsoft could sue to block any deal between Yahoo Japan
and Google, though that may just delay the inevitable.