Japan Approves Google-Yahoo Japan Accord; Dismisses Rakuten's Concerns

Japan’s Fair Trade Commission approved a local web-search partnership between Yahoo Japan Corp. and Google Inc., dismissing concerns raised by Japanese lawmakers and Rakuten Inc. that the deal could hurt competition.

The alliance isn’t anticompetitive, the antitrust watchdog said in a statement in Tokyo today.

The decision clears the way for Yahoo Japan to use Google’s search and advertising technology from as early as this year. The agreement, announced in July, frees the operator of Japan’s most-visited Web portal from having to develop its search technology and may help it in mobile search as handsets equipped with Google’s Android operating system become more popular.

“Competition between Google and Yahoo Japan, as well as others in the online advertising market, will remain vigorous,” Yoshito Funabashi, a Tokyo-based Google spokesman, said in a telephone interview today. Masaki Hanyu, a spokesman for Yahoo Japan, said by phone the company plans to advance in its partnership with Google as planned.

A group of Japanese opposition lawmakers today urged the FTC to investigate the deal, saying the agreement may reduce competition. This follows a similar request in October by Rakuten, a Japanese Internet shopping site operator.

“There is a danger that the tie-up will impede a healthy growth and development of not only the search industry but other domestic Internet services,” Hirotoshi Kato, a spokesman for Tokyo-based Rakuten, said in a telephone interview.

Yahoo Japan climbed 2.1 percent to 31,300 yen at the 3 p.m. close of trading on the Tokyo Stock Exchange, while Rakuten slid 0.2 percent to 66,500 yen on the Jasdaq Securities Exchange. The Nikkei newspaper reported the FTC decision earlier today.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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