Google Obligated to Abide by Corrective Action Plan in Japan
The Fair Trade Commission (FTC) in Japan has obligated Google LLC to comply with a corrective action plan over concerns that the company unfairly restricted a Japanese rival's search advertising business. This marks the first administrative action against Google based on the Anti-Monopoly Law.
The FTC certified Google's plan as workable, following an investigation that revealed Google's demand for Yahoo Japan Corp. to stop delivering search advertisements to smartphone sites other than its own. This demand, made in November 2014, effectively hampered Yahoo's ability to deliver such advertisements from September 2015 onwards.
Following the FTC's investigation, Google retracted its demand, allowing Yahoo to resume its services in November 2022. Google has also submitted a voluntary plan to the FTC under the "commitment procedure," a type of administrative action introduced in 2018 to address suspected anti-competitive practices.
Under this plan, Google has committed to not restricting its technology to Yahoo for the next three years, unless authorized by the FTC. Additionally, Google will accept regular audits by outside experts and report on its compliance with the plan for three years.
The FTC will continue to monitor Google's operations and may reopen its investigation if the company fails to fulfill its obligations. However, the FTC will not issue a cease-and-desist order or a surcharge payment order, which are typically imposed as punishment for anti-competitive practices.
The domestic market for search advertising in Japan is estimated to be worth 1.07 trillion yen ($6.93 billion) as of 2023. According to an FTC report released in 2021, Google dominated the market with a 70-80% share as of fiscal 2019, with Yahoo holding the remaining share.