Google's Betrayal and the FTC's Investigation
The Fair Trade Commission (FTC) in Japan felt deceived by Google LLC's actions in a business deal with Yahoo Japan Corp. The FTC had approved Google's technology for keyword-triggered search advertising services, but Google later effectively banned Yahoo from using that technology for smartphone sites.
This betrayal led the FTC to open an investigation into Google in 2022, culminating in the first administrative action against the search engine giant based on the Anti-Monopoly Law. Google is now obligated to fulfill the measures laid out in its voluntary corrective action plan concerning its business with Yahoo Japan.
The story began in 2010 when Yahoo Japan decided to use Google's advertisement delivery technology after its U.S. parent company stopped technological development. The proposed tie-up raised concerns about Google's potential dominance in online advertising, but the FTC approved the partnership after concluding that the contract would allow Yahoo to operate freely.
However, the power balance shifted in 2014 when Google demanded that Yahoo stop delivering search advertisements to smartphone sites other than its own using Google's technology. Yahoo complied, becoming unable to deliver such advertisements from 2015 onwards.
Despite regular communication with both companies, the FTC remained unaware of the altered terms until it initiated its investigation in 2022. Google quickly reverted the contract to its original form upon being contacted by the FTC.
This incident highlights the FTC's initial oversight and Google's deceptive practices. The FTC acknowledges its failure to fully recognize the changing digital market and respond accordingly. Google, on the other hand, faces the consequences of its actions and is obligated to fulfill its commitment to fair competition.