Google Faces Antitrust Action in Japan for Allegedly Stifling Yahoo's Search Advertising Business
The Fair Trade Commission (FTC) of Japan is poised to take its first administrative action against Google LLC based on the Anti-Monopoly Law. The FTC suspects Google of impeding Yahoo Japan's search advertising business for smartphone sites.
The investigation, which began in 2022, centers on a contract between Google and Yahoo Japan. The FTC believes this contract restricted Yahoo's ability to deliver advertisements on smartphone sites, potentially violating antitrust laws.
In response to the investigation, Google submitted a plan to the FTC this month outlining voluntary measures to halt the alleged anti-competitive practices and prevent future occurrences. The FTC is expected to soon announce its decision on the plan, potentially certifying it as workable under its "commitment procedure."
This procedure allows the FTC to address suspected anti-competitive practices promptly without resorting to formal legal proceedings. Google has confirmed its cooperation with the FTC's investigation and awaits the commission's approval of its corrective plan.
The Japanese search advertising market is estimated to be worth 1.07 trillion yen ($6.93 billion) as of 2023. Google dominates the market with a 70-80% share, while Yahoo holds the remaining portion. Since 2010, Yahoo has relied on Google's advertisement delivery technology for its search advertisement business on websites other than its own.
In the mid-2010s, Google allegedly demanded that Yahoo stop delivering advertisements for smartphone sites. Yahoo, dependent on Google's technology, complied with the demand. Google retracted this demand in 2022 following the FTC's investigation.
If the FTC approves Google's commitment plan, the investigation will conclude without formally recognizing Google's behavior as a violation of the Anti-Monopoly Law. Google will be obligated to fulfill the measures outlined in its plan, and the FTC will not impose any fines or cease-and-desist orders.