Watchdog OKs Yahoo Japan-Google tieup

Friday, Dec. 3, 2010

FTC says search engine alliance doesn't breach antimonopoly law

Compiled from Kyodo, AP

The planned tieup between Internet search engines Yahoo Japan Corp. and Google Inc. of the United States will have no immediate problem with Japan's antimonopoly law, the Fair Trade Commission concluded Thursday.

The antimonopoly watchdog investigated the tieup in response to requests by U.S. computer software giant Microsoft Corp. and Japanese Internet mall operator Rakuten Inc., which have suspected the alliance as affecting fair market competition.

The FTC said it doesn't foresee any problems as long as the two companies continue as separate entities and offer distinctive services. But it also warned it will keep checking for possible violations.

The decision clears the way for Yahoo Japan to use Google's search and advertising technology from as early as this year. The agreement, announced in July, frees the operator of Japan's most-visited Web portal from having to develop its search technology and may help it in mobile search as handsets equipped with Google's Android operating system become more popular.

The alliance is expected to enable the Google technology to control more than 90 percent of Japan's Internet search service market.

Earlier in the day, opposition lawmakers urged the FTC to probe the deal, saying it may hinder competition.

"We are asking the Fair Trade Commission to take another look at this," Jiro Kawasaki, a Liberal Democratic Party lawmaker and a member of the study group on the issue, told reporters.

"If this deal goes through, there needs to be some sort of a check mechanism."

This follows a similar request in October by Rakuten.

Rakuten filed a complaint with the FTC over the tieup on Oct. 20, saying in a statement "the tieup by the two firms will lead to an information monopoly for Google Inc."

"The deal threatens to hinder not only the search engine sector but also many Internet services in the country from developing," Rakuten said.

In August, after the tieup was announced, Yahoo Japan President Masahiro Inoue dismissed criticism filed by Microsoft Corp. on the grounds that the two firms will use their own editing and advertising policies.