Microsoft: Yahoo Japan's Google Search Deal Anticompetitive


The deal, which was announced Tuesday, finds Yahoo Japan choosing to adopt Google's search engine to power its searches -- something Microsoft described as blatantly anticompetitive, even as Japanese Fair Trade Commission officials rushed to defend the deal Wednesday.

"This agreement is even more anticompetitive than Google's deal with Yahoo in the United States and Canada that the Department of Justice found to be illegal. The 2008 deal would have locked up 90 percent of paid search advertising. This deal gives Google virtually 100 percent of all searches in Japan, both paid and unpaid," said Brad Smith, Microsoft's general counsel, in a statement e-mailed to a number of news sources.

In a late Tuesday blog post, Microsoft vice president deputy general counsel Dave Heiner also ripped the deal.

"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," Heiner wrote. "Google alone would decide what consumers in Japan will find, or not find, on the Web."

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Microsoft and Yahoo have an existing search partnership in several countries, including the United States, but not in Japan. Yahoo itself owns 35 percent of Yahoo Japan, whose majority stake belongs to Softbank. Yahoo Japan, which currently operates using Yahoo's search engine, says it commands about 57 percent of search market share in Japan.

Japanese antitrust regulators moved quickly to defend the deal Wednesday. According to The Wall Street Journal. Takahide Matsuyama, secretary-general of Japan's Fair Trade Commission, told reporters at a news conference in Tokyo that the deal was approved because Google and Yahoo Japan will run their businesses separately, even though they'll share search and advertising platforms.

"Based on those conditions, the partnership wouldn't immediately cause any problems related to antitrust regulations," Matsuyama reportedly said.

Google and Yahoo previously ended a search advertising agreement in the United States in 2008 after U.S. antitrust regulators eyed a lawsuit.