Google recently has made a big play to take over the majority of the internet search business in the Japanese market as part of an aggressive campaign to shut Microsoft out; but Microsoft is not going to sit idly by while Google gains a virtual monopoly in Japan and they have a plan to block the deal .
Microsoft's legal team will pitch its case to the Fair Trade Commission in Japan. The basis of the argument is simply that the deal that Google has made violates fair trade and would hurt competition by giving them far too much control over the search engine advertising industry in Japan where Google already controls 51% of the paid search engine advertising market. And although in the general search market, Yahoo Japan leads by a large margin, this new deal would give Google an even bigger share of the market making competition difficult.
Microsoft has a strong foundation for their argument since a similar deal was attempted by Google in the United States in 2008. The deal was struck down by the U.S. Justice Department and by most accounts the Japanese deal is even worse than its US predecessor. It seems clear that this deal should be blocked in the interest of fairness and competition.
If Google were to be allowed to carry through with the deal, Yahoo Japan would not only switch from Microsoft to Google to power its search engine results but Google would also control the basic advertising platform for Yahoo Japan searches. This means that in addition to the 51% of the search advertising they already control they would control of an additional 47% of the market which Yahoo Japan currently has. This level of near total control of the market is not only bad for fair business, it is bad for users and businesses who rely on internet exposure.
Japan's Fair Trade Commission originally approved the deal because Google claims that while Yahoo Japan, owned in part by the Japanese company SoftBank, will be using Google's platform, it would be possible for them to customize the results themselves; however, Microsoft is arguing that the decision was made without any input from other advertisers and competitors regarding how the deal would affect the market and they are asking officials of Japan's Fair Trade Commission to reconsider its decision and to shut down the Google Yahoo deal.
This on top of the fact that Google has recently come under fire for the secretiveness associated with the way in which Google's algorithms are tailored to return search results could mean that Google would be eliminating the competition in more ways than one and could spell a troubling a future for the free and fair flow of information and services on the internet in the future.
*photo courtesy of Bantosh in the public domain.