It was announced today that Yahoo Japan will switch its search technology and paid search provider to Google. Yahoo! Japan and Google combined already provide virtually 100% of paid search ads in Japan. Furthermore, this deal would have knock-on effects in related sectors such as search and contextual advertising.
ICOMP has a strong stance on this issue and has just published a press release regarding the deal (available in English & Japanese). Reduced competition would harm online publishers and advertisers, and ultimately consumers, in a number of ways. A combined Google/Yahoo! Japan would win almost every bid to provide online advertising services or search syndication deals. It would deprive their competitors of the necessary scale to continue to compete in these markets. It would also increase the ability of Google and Yahoo Japan! to exercise their market power by increasing advertising prices whilst at the same time reducing the share of advertising revenue paid to online publishers. There should be very great concern that Google would achieve a near-monopoly position in Japan, given the many significant antitrust investigations taking place in countries where it has already acquired a near-monopoly position. For those reasons, the presumption must be that it should not be allowed to go ahead and that it should be blocked on antitrust grounds.
As Japan is the world’s second-largest market in advertising, anything that affects online advertising within the country will ultimately impact the global online marketplace – especially in this instance as Google has a dominant presence in many other parts of the world. In fact, on a recent trip to Japan, I had several conversations with key decision-makers about the issues surrounding the current online marketplace, and they expressed concern with the state of competition in their region. In addition, we have been receiving an increasing number of inquiries from the Asian market on competitive online marketplace issues. The rising level of interest has led to the launch of both Japanese and Chinese versions of the ICOMP website to provide easy access to ICOMP resources in those languages. There is clear demand across the globe for a healthy online environment with free and fair competition.
A number of antitrust authorities around the world have examined Google and its behaviour and a consensus is emerging that Google has an overwhelmingly dominant position on the markets for search and search advertising in the U.S., Europe and elsewhere. ICOMP urges the competition regulators in Japan as well as elsewhere in the world to ensure that their rules are fully enforced, and to play their part in achieving a truly competitive online marketplace.
David Wood
ICOMP Legal Counsel