The Google-Yahoo Japan Partnership Gets Green Signal from FTC

By On 6, Jan, 2011 |  In: Internet Marketing | Tags: , , ,  | 0

Yahoo Japan Corp and Google Inc officially became partners recently. Under the terms of the partnership, Yahoo Japan will start using Google’s search technology on its site. Before deciding to partner with Google, Yahoo Japan officials consulted Japan’s FTC (Fair Trade Commission) about probable hurdles. Following FTC’s green signal the partnership was formally announced.

The partnership led to concerns among industry experts, lawmakers and rivals such as Microsoft who argued that the partnership would deter competition and asked the FTC to look into the matter. The agency questioned associated businesses and advertisers before announcing its final decision. The decision was announced on Thursday and surprisingly, the reasons for approval were also released.

The first concern against the partnership was Google getting a huge benefit in the search engine market in Japan, making it difficult for other companies in the market to survive as well as hindering the entrance of new companies.

On this point, the FTC concluded that as Japan Yahoo was on the lookout for a new search technology partner, partnering with Google was a rational business decision.

The second objection was that the partnership would make it easier for both the companies to collude and increase advertising fees.

FTC announced that no evidence of any pressure by Google on Yahoo Japan in this regard was found. Google will command 90% of Japan’s search engine market share after the partnership. If the combined efforts of companies lead to creation of a valuable product, which makes it harder for competitors, it cannot be said to be a violation of anti-monopoly policies as it is result of fair competition, the commission adjudged.

Firewalls to protect information regarding advertisers and fees will be built by both the companies. However, FTC will be keeping a watch over  how the partnership goes. People from the internet marketing industry in Japan will also keenly observe the impact that this partnership will have on the online search market.

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