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Japan Holds Google Accountable Over Ad Practices In Antitrust Action

The Japan Fair Trade Commission (JFTC) is raising regulatory pressure on Google owner, Alphabet, to reform its business practices over alleged unfair restrictions on a search advertising partnership with Yahoo.

The media report in the Nikkei, however, added that the action against Google is to make it voluntarily implement those reforms.

The JFTC has been investigating Alphabet regarding keyword-targeted search ad technology that it provides to Yahoo.

Google is believed to have already submitted a reform plan to the JFTC to address the issue, which the Japanese body is expected to accept shortly.

Google earns more than 80 per cent of its revenue from ads. A dispute between Google and Yahoo goes back several years.

Yahoo and Google both display ads in the results of searches on third-party websites, and split the profits with the site operators. In 2010, the two companies entered an agreement under which Yahoo could use Google’s search engine and distribution system for keyword-targeted ads.


A few years later, Google reportedly told Yahoo to stop displaying search-linked mobile ads on third-party sites.

Yahoo therefore changed its contracts with its customers as they were concerned that if it didn’t comply, it could lose access to Google’s search engine.

In 2022, the JFTC launched an investigation into whether such moves by Google constituted unfair practices under Japanese antitrust law. Google is believed to have then rescinded its previous demand to Yahoo.

Last month, the JFTC notified Google that it was indeed suspected of violating the law. The notification was issued through an administrative process known as commitment procedures which allows the recipient company to voluntarily submit a remedial plan.

This latest action against Google is in addition to the action that the JFTC was looking into late last year. In October, media reports indicated that the regulatory body was examining whether Google entered into agreements with Android smartphone makers to share search ad-related revenue on the condition that the device manufacturer does not install a rival search engine. Therefore, it was considering whether Google services are prioritised on Android phones.

The outcome of that investigation is yet to come to the fore, but it is unlikely that the JFTC is going to let Google go unchecked.

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