Microsoft calls Google-Yahoo search pact in Japan anticompetitive

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.
Written by Mary Jo Foley, Senior Contributing Editor

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."

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