Trouble brewing for Yahoo-Japan/Google Monopoly Sweetheart Deal?

Japanese online retailer, Rakuten, has formally objected to the Yahoo-Japan/Google monopoly deal in a complaint to Japanese antitrust authorities (JFTC).

• I expect others in Japanese industry to also complain both publicly and privately to the JFTC.
  • First, the Yahoo-Japan/Google partnership would control over 90% of the Japanese search and search advertising business and also subordinate all Japanese online businesses, that depend on search to be found and/or monetized.
  • Second, the JFTC approval was a secret technical decision that amazingly did not consult or consider the views of any other Japanese stakeholders, even though the decision could eventually put much of Japan's online industry out of business in the years ahead.

In my Tokyo speech to industry stakeholders last month, I explained how a Yahoo-Japan/Google search advertising monopoly inevitably would lead to dependency, decline and disintermediation for Japan's high tech industry and economy.

It is logical, sensible, and basic survival instinct for Japanese stakeholders -- whose fate would be totally at the mercy of a Japanese Googleopoly -- to voice serious objections privately and publicly to Japanese regulators.

• Consequently, Japanese regulators may be looking for a face-saving way to reopen or condition the Yahoo-Japan/Google deal, and to give stakeholders an opportunity to voice their serious concerns and to prevent an anticompetitive outcome.

In addition, Japanese stakeholders should take note of recent developments that suggest a Yahoo-Japan/Google monopoly could be very bad for them:

• Powerful Facebook, with 500 million users worldwide, recently has voiced fears in Washington that "Google will prioritize a Google profile page over a Facebook page in search results." If gigantic FaceBook is worried about Google, smaller Japanese rivals should be very worried about Google.
• Advertisers, including Japanese advertisers, also have new reason to be very worried because Google has introduced yet another serious advertising conflict of interest. Google's comparison ads, which get most prominence above organic search results, now compete against Google's core advertisers.
  • In a nutshell, Google is forcing advertisers to either pay twice to maintain the top position or to suffer lower click-throughs, because the winner of the comparison ads will siphon off clicks from traditional advertisers.

In sum, the more people understand the reach of Google's ever-proliferating tentacles and power, the more concerned they become, and the more complaints that antitrust authorities will hear.

• The lesson for the JFTC here is that they either can listen to Japanese stakeholders while they are still viable and before they are irreparably harmed, or they can hear from them after they are no longer viable businesses and have been irreparably harmed.
• Simply, prevention is better and easier than resuscitation.