Is that M & A okay? Handling of user data is November 28, 20:50

The world of IT business that is described as “Winner-Takes-All”. Yahoo and LINE have taken the lead in management integration in order to stand at the overwhelming top in Japan and compete with overseas forces such as GAFA. Although it is likely to be the largest M & A (acquisition or merger) in the history of Japanese Internet business, screening by the Fair Trade Commission is the key to the realization. The Fair Trade Commission regards the issue of handling monopoly “data”, which is a source of profits in the digital era, and is about to rigorously enforce antitrust laws. The screening process is not only a test for future internet business M & A, but it is also irrelevant for us consumers who are creating data and providing it to companies every day. (Yutaro Miyamoto, reporter, Economic Department)

"Careful judgment" for integration

"Need careful judgment"
Two days after the announcement of the management integration of Yahoo LINE, Akinori Yamada, Secretary General of the Fair Trade Commission, said in a press conference that it was general.

Under the Antimonopoly Act, the Fair Trade Commission is responsible for examining large-scale M & As from the perspective of distorting the competitive environment of the market and resulting in disadvantages for consumers. Generally, market share after integration is the basis for judgment, but from the conclusion, it is unlikely that the result will be that the integration is not allowed.

But why did you show the attitude of “careful judgment is necessary”? That's exactly the time when the FTC is about to rigorously enforce the Antimonopoly Act on the giant IT companies that Yahoo LINE aims.

Not only Japan, but also countries around the world are keeping pace with stricter regulations on so-called platformers, as represented by GAFA (Google Apple Facebook Amazon). In October of this year, the FTC just presented a new guideline for IT company M & A screening.

The focus is “data oligopoly”

The focus of the review is “Data Oligopoly”. A new review guideline that will be finalized within the year is expected to clearly specify the amount and quality of data, and judgment will be made from the perspective of whether data and customers will be locked in due to corporate integration. It will be.

The officials of the FTC point out that “one of the points of review” is smartphone QR code payment service. Looking at the number of registered users, 56 million people when the Yahoo camp's “PayPay” and “LINEPay” are combined, and the usage rate of payment exceeds 50% by simple calculation (according to MMD Research Institute). Because it becomes huge and can be seen as the oligopoly progresses.

What is difficult here is how to set the “market range”. Certainly, if it is limited to QR code payments, the market share will increase, but if you look at the wide framework of cashless payments, electronic money and credit cards will also be competitors, and the share of Yahoo / LINE will also decrease. There are no specific indicators for oligopoly, and it is expected to be analyzed from various viewpoints such as the number of users, the size and ratio of payments, and the amount of data obtained from payment history.

“Future” is also on top of the examination

In addition, the wide range of services such as search, SNS, online shopping, and music streaming make it difficult to review. The monthly users of Yahoo and LINE are 6743 million and 82 million, respectively. If both companies come together, a total of more than 100 million data will be collected.

The platformer's business model is to create new services one after another by expanding the field of services, collecting more data, and using and analyzing the data. Just looking at the current state of the business is not enough to influence it.

In addition, Yahoo LINE is sure to be particularly large in Japan, but the scale of the company is not as good as that of the American GAFA or the Chinese BAT (Baidu Alibaba Tencent). The key point is how to position the company in the global market based on the characteristics of online business where services are being competed across borders.

“We will judge what will happen in the rapidly changing digital field,” said Mr. Yamada, General Manager of the Fair Trade Commission.

In this case, it is likely to consider what kind of business development will take place after the integration.

What are the conditions?

After carefully examining these points, attention is paid to what “problem-solving measures” are required as a condition for the FTC to approve management integration for Yahoo LINE.

In conventional large-scale M & As, it is common to require some businesses to be separated or sold. However, when the oligopoly of data is the focus, it is not practical to separate or sell businesses.

A possible condition is “appropriate release of data”. For example, some companies that provide household account book apps use purchasing data for smartphone payments, but if this data is enclosed, other companies can be locked out. Not only will your service be advantageous, but it may also lead to potential innovation through competition.

It is likely that the conditions under which the FTC will impose will greatly affect the business development after the integration of the two companies. Yahoo LINE is expected to report to the FTC at the beginning of the year, and the screening will be conducted next year.

As a result of the integration of Yahoo and LINE, there is a possibility that the crustal movement of the IT industry will occur and M & A will become more active. Judgment made by the FTC, regardless of the outcome, is likely to influence the future of Internet business in Japan.

Yutaro Miyamoto, reporter of the Ministry of Economic Affairs Entered the Sapporo Bureau in 2010