Microsoft calls Google-Yahoo search pact in Japan anticompetitive

Microsoft calls Google-Yahoo search pact in Japan anticompetitive

Summary: Microsoft is none too pleased about a newly minted four-year search pact between Google and Yahoo in Japan. So far, the Softies aren't saying whether they intend to fight the deal via official channels, however.

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Microsoft is none too pleased about a newly minted four-year search pact between Google and Yahoo in Japan.

Yahoo Japan on Tuesday said plans to use Google's search engine and search ad-delivery system. It's worth noting, as NewsFactor did, that Yahoo owns 35 percent of Yahoo Japan, while distributor SoftBank owns another 39 percent. Financial terms of the four-year, non-exclusive partnership were not disclosed.

Yahoo Japan execs were quoted as saying Microsoft was not yet as far along as Google in the Japanese-language services it offers.

Unsurprisingly, Microsoft disagrees. A Microsoft corporate spokesperson sent me the following statement about the deal on July 27:

“This agreement is even more anticompetitive than Google’s deal with Yahoo! in the United States and Canada that the Department of Justice found to be illegal. The 2008 deal would have locked up 90 percent of paid search advertising. This deal gives Google virtually 100 percent of all searches in Japan, both paid and unpaid. It means there will be no search competition in Japan and that Google will end up controlling all personal search information for all Japanese consumers and businesses.”

Those sound like fighting words. Should we infer Microsoft is poised to file a formal complaint (if it hasn't done so already)? The same spokesperson said there is "nothing to comment on at the moment."

Microsoft officials said last week Microsoft has begun providing Bing search results to Yahoo as part of a sweeping search pact forged between Microsoft and Yahoo last year.

Update: Microsoft has posted to its "On the Issues" blog the company's more detailed take on the Google-Yahoo pact. David Heiner, Microsoft Vice President and Deputy General Counsel, notes:

"Google reports that it already received approval from the Japanese Federal Trade Commission for the deal, even before it was announced and before the JFTC reached out to advertisers, publishers and competitors to learn about the likely competitive effects of the deal.  It will be interesting to see over the next few weeks if that is really accurate."

Topics: Browser, Google, Microsoft, Social Enterprise

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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32 comments
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  • RE: Microsoft calls Google-Yahoo search pact in Japan anticompetitive

    And Microsoft - Yahoo pact here in the US is competitive just because Bing has significantly lower search query percentage than Google?
    vkelman@...
    • Yes (nt)

      @vkelman@...
      x I'm tc
    • MS complaining about monopoly?

      @vkelman@... They've had one for decades with operating systems, office suites and browsers. They are not allowed in search? Better for everyone, as if they were allowed in, innovation would become bloatware like their os, suites and browser.<br><br> History has proven that innovation provides customer satisfaction, look at Goggle, Yahoo out Apple. You look at Microsoft products, all you see is bloat.<br><br>Japan did well in not allowing MS to be part of their search equation, it serves their customers intrest better.
      Uralbas
      • Master Joe Says...Uneducated

        @Uralbas You won't agree, but you really are. What an utterly stupid thing to say. And, by thing, I mean your entire post. The dominance of Windows, Office, and IE are in no way shape or form due to anything these days other than user preference. Linux has been around long enough, as has Mac OS, for users to be well aware of them. It's just like saying that AMD gets an unfair minority role in the market because Intel doesn't play by the rules. No. Intel has doubled its quality with every new generation of processors over the past 4 years, and AMD has increased by only half in that time. Intel has a better CPU, and, therefore, has the lion's share of the market.

        Now, the difference here is that Google and Yahoo are the search leaders. If the two leaders form a pact, that is not the same as the 2nd and 3rd place players (Microsoft and Yahoo) forming a pact. That would be like Microsoft and Apple forming a pact to put the final nail in the Linux cofin. There would be countless posts of Linux advocates whining and crying about that. But, since this move is against Microsoft, everyone praises it as good? If there is one thing the tech industry DOESN'T need, it's that kind of thinking or behavior. Not EVERYTHING Microsoft does is evil, nor is it good. Similarly, not EVERYTHING an open source company does is good, just because they are open source. Canonical has its fair share of problems with Ubuntu. And, for all of thsoe who want to argue about the origins of Windows, and the whole being based on technology they "stole" from Apple, might I remind you that Ubuntu is based off of Debian, and that many of the popular Linux distros are based off of other ones, just like Mac OS is a shiny interface on top of a BSD? It isn't very hard to draw these comparisons. The problem is that people deny them because they don't help their own views on the subject. There are plenty more, but I won't waste the time putting ALL of them here, only to have you come up with some ridiculous rant which suggests I am wrong based on no hard evidence at all, or on evidence obtained from such unbias sites as wehatemicrosoft.com and ifmicrosoftcuredcancerwewouldstillhatethem.com

        --Master Joe
        SteelCityPC
  • RE: Microsoft calls Google-Yahoo search pact in Japan anticompetitive

    And Microsoft can take over Yahoo's search in the US and that is not a problem? If they were really concerned about the search market in Japan, they would have used the relationship they have forged with their search partnership here to get a search deal done for Japan.
    pcnerd37
    • RE: Microsoft calls Google-Yahoo search pact in Japan anticompetitive

      @pcnerd37 - Yes! That's Microsoft's point: Since Google owns and controls the vast majority of the search market, them acquiring even more market share and control by doing a deal with the #2/3 in said market is anticompetitive.

      MS had to deal with those realities in the early 2000's. Now Google is going to have to learn them in the early 2010's.
      de-void-21165590650301806002836337787023
  • Is MSFT painting themselves into a corner?

    Is it not MSFT and Yahoo who have a deal in North America?

    At any rate they will have to take it up with the Japanese Government, and if so, it makes me wonder if Google with take issue with the MSFT-Yahoo deal here in the states?
    Snooki_smoosh_smoosh
    • RE: Microsoft calls Google-Yahoo search pact in Japan anticompetitive

      @JM1981

      Both MSFT and Yahoo togehter don't have nearly of 50% market share. It's far away from being uncompetive. But 100% is definitly a watch for untitrust. We will see...
      Mr.Gonzo
      • What a double edge sword we wield.

        @Mr.Gonzo... So 90% market share in the PC market is competitive, but 90% combined share is anti-competitive? hmmm.

        http://www.them.pro/Search-engine-market-share-country

        Basically MSFT is the Pot calling the Kettle black.
        Snooki_smoosh_smoosh
      • Global pawn game

        @JM1981<br><i>Basically MSFT is the Pot calling the Kettle black.</i><br><br>They brought cornering markets, undercutting competition and twisting hesitative arms to an art form. It's how they blueprinted their commercial empire. Now they wanna cry in their soup when the tables turn. Go figure.<br><br>SOS MS
        klumper
    • google did take issue with it, and they got told to shut up

      since there was no basis for their whinning. Its all about % of marketshare so MS was right in the us and google is wrong in japan. Its simple arithmetic but you can use a calculator if its beyond your faculties
      Johnny Vegas
      • I wish you could apply the same principles to PC marketshare

        Then you might have some credibility here.
        LTV10
    • RE: Microsoft calls Google-Yahoo search pact in Japan anticompetitive

      @JM1981
      It would not do them any good, since this has already won approval from the regulators (U.S.)
      eargasm
  • Wait a minute

    MS is complaining that Google and Yahoo Japan are working together, yet Yahoo and MS are working together here? wow, hypocrite.
    KBot
    • RE: Microsoft calls Google-Yahoo search pact in Japan anticompetitive

      @KyleDDM
      That's because Bing + Yahoo is a monopoly. Oh wait, no it's not.
      illegaloperation
    • RE: Microsoft calls Google-Yahoo search pact in Japan anticompetitive

      @KyleDDM
      No! Legal (crite). Also, for all who wish to know the "PC" market share thingy has been litigated already. So, moot point!
      eargasm
      • RE: Microsoft calls Google-Yahoo search pact in Japan anticompetitive

        @windozefreak - "the "PC" market share thingy has been litigated already. "
        And your basis for such a claim is???

        the fact that we can't buy computers that don't have the Windows tax on them (blank computers with no OS)

        Or computers that have an alternative OS on them?

        or are these "thingys" that Microsoft won't allow just part of their rights as an anti-competitive monopoly?

        After all, if M$ would be FOR competition, they would not be stopping Ubuntu powered computers from being sold... or marketed... or they would not have forced Dell to take down the statement that Ubuntu was more secure, etc...

        kind of blows your 'thingys' out of the water
        sunworks
  • Quick Lesson on Antitrust Law

    It's not the pact that is anticompetitive...hence, please stop saying that the Yahoo-MSFT deal is also anticompetitive and MSFT is a bunch of whining hypocrits.

    It's that the deal creates an anticompetitive ENVIORNMENT. An enviornment where there is no incentive to have additional competitors and/or an enviornment that doesnt support additional competitors. Advertisers would never go to a 2nd place if they can lock up 90% of the market in Google. The Yahoo-MSFT deal is the opposite of anticompetitive, it is pro-competitive by trying to establish a duopoly of search advertising platforms.

    Great counter example - IE vs Safari. One can say, "in the EU, MSFT has to do the ballot screen but Apple gets to put Safari on without punishment." It's frustrating for IE lovers and MSFT people, but it's not hypocritical. It's simply fair. Given MSFTs dominance in the OS market, leveraging that dominance to the same extent in other categories is illegal.

    The Yahoo JP - Google deal is anticompetitive and would not hold in a US Court for a second. Literally, it would be thrown away and never approved. For Japan, it's different.
    brianhem10
    • anticompetitive

      Hi. I am quoting MS saying the pact is anticompetitive. MS did not say the environment was anticompetitive; they said the deal was. It is not me saying that -- I am quoting them. MJ
      Mary Jo Foley
      • OK, I am totally confused .....

        @Mary Jo Foley

        What exactly became of the deal where MS bought out or bought into Yahoo? Am I getting senile and just don't remember, or did I just miss something?

        So you are telling me that the deal (whatever it ended up being) between MS and Yahoo only applied to search in the US? I don't get that at all.

        And I agree with MS that if the combination of efforts between Google and Yahoo in Japan gives them anywhere NEAR 100% control of search revenue there, that should not be legal.

        Where's the beef, MJ ?
        babyboomer57