Strong concerns about monopolization and oligopoly by IT giants such as Google of the United States were expressed in the final report on digital advertising released by the Japan Fair Trade Commission (JFTC).
In the report, which was released on Wednesday, the JFTC called on IT giants to make voluntary efforts to prevent possible violations of antitrust laws and opaque transactions.
The report clearly states that Google may not only be engaged in unfair trade but also become a monopoly that impedes competition, saying, "The risk of antitrust problems as a private monopoly is increasing."
Google has a 70% to 80% share of the "search-linked" advertising market, overwhelming that of Yahoo Japan Corp., which accounts for 20% to 30%. Google also has an edge in other forms of digital advertising.
Google's source of strength comes from having a business model, which dominates the entire digital advertising industry. In addition to a search engine that displays ads and social media such as YouTube, the company is also involved in the advertising intermediary business, receives orders from companies that wish to advertise, as well as the construction of advertising systems. This is known as a "vertically integrated" business model.
Facebook of the United States and Yahoo also operate powerful social media and search engines, and they have large market shares.
The report revealed the superiority of IT giants to advertising brokers and media outlets in business. Such cases included unilateral agreements that allowed IT giants to abruptly shut down their services, in addition to IT giants restricting advertising brokers and media outlets from doing business with other IT giants.
--'Necessary measures'
In response to the concerns raised by the JFTC, IT giants stressed that they are not doing anything detrimental to their business partners but they are taking necessary measures.
For example, regarding claims by their business partners that there were unilateral changes to contracts, IT giants justified their actions by saying the changes were "aimed at improving services and maintaining security," or "to deal with any violations of the terms of service."
Even in the case of system changes, IT giants claimed that they provide sufficient transition periods.
In response, the JFTC called for sufficient explanations to be given to business partners when changing contracts or systems, and for business partners to be provided with opportunities to express their opinions.
The JFTC also noted that it is desirable for IT giants to take into account any rational reason why a business partner cannot accept a change.
"Problematic behaviors will hinder technological innovation. We expect IT giants to make improvements voluntarily," Shuichi Sugahisa, the secretary general of the JFTC said at a press conference on Wednesday.
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