Yahoo! Taiwan Holdings Limited & YAHOO! TAIWAN INC

Case:

Key Words:

network information service enterprise, portal site, key words advertisement

Reference:

Fair Trade Commission Decision of November 8, 2007 (the 835th Commissioners' Meeting)

Industry:

Web Portals (6311)

Relevant Laws:

Article 6 , 11 and 12 of the Fair Trade Law

Summary:

1. Hong Kong's Yahoo! Taiwan Holdings Limited (originally known as Yahoo! Taiwan Trading Limited, hereinafter referred to as "Yahoo! Taiwan Holdings Limited") intended to buy the major business and assets from YAHOO! TAIWAN INC. (hereinafter referred to as "YAHOO! TAIWAN") in cash. This fits into the merger type defined in Article 6(1)(iii) of the Fair Trade Law. YAHOO! TAIWAN has also participated in more than 25% of domestic Internet advertisement market,, which not only meets the threshold for merger filing requirement of Article 11(1)(ii) of the Fair Trade Law, but also does not fall into any of the exceptions specified in 11(1) of the Fair Trade Law. Hence, according to the Article 11(1) of Fair Trade Law, YAHOO! TAIWAN should file the merger application to the Commission prior to the merger.
2. Both the merger participants belong to the Yahoo Group. "Yahoo! Kimo Search marketing" is the brand name of Yahoo! Taiwan Holdings Limited in key word marketing market. There is no obvious difference in competition comparing to the market as a whole after merger. Though, Yahoo! Taiwan Holdings Limited would successfully gain the first place in the Internet advertisement market in accordance with it's market share and have the relatively dominant power over the downstream advertising agents or the advertisers. However, due to the characteristic of Internet market and popularity of Internet searching service, advertisers can easily switch to or change to a new partner whom provides them the same network service. In addition, the channels of advertising services are too many so that the large-scale advertising agencies are able to contend with it. The leading searching engine Google also entered in the domestic market in January 2007 and the keyword searching advertisement of Google apparently increased the competition in domestic Internet advertisement market. The merger of Yahoo! Taiwan Holdings Limited and YAHOO! TAIWAN is an integration of capital assets and operation structure of the Yahoo Group, and will not in reality reduce or damage competition from the market. Thus, in accordance with the Article 12(1) of Fair Trade Law, the merger at issue would not be prohibited by the Commission. However, in order to prevent the merging enterprises to use the merger to restrict competition, and to abuse its market position and to ensure the benefits of the merger outweigh the negative impact of restrictive competition caused by the merger, the Commission will, in according with Article 12(2) of the Fair Trade Law, impose conditions forbidding the enterprises to utilize the dominant market position to inappropriately prevent web links to, sending and receiving emails or other services correspondent with competitors; restrict counterpart to from dealing with particular business or similar behaviors ; inappropriate price setting, maintain or change, restrain the counterpart to deal exclusively with the enterprise only, or to interfere with any fair competition or make abuse use of market position.

Appendix:
Yahoo! Taiwan Holdings Limited.'s Uniform Invoice Number: 27240313
YAHOO! TAIWAN INC.'s Uniform Invoice Number: 70468838

Summarized by Lin, Shu-Ling; Supervised by Chiang, Kuo-Lun