The watchdog has said the deal will not counter the anti-monopoly law, but Microsoft has condemned it, saying it would give Google near-total control over the third-largest market for search queries in the world.

Earlier this week Yahoo! Japan announced the deal with Google, which is expected to see both giants dominate the Japanese market.

Yahoo! Japan said it currently has about a 57 percent share of the search market in the country and Google has about 37 percent. Microsoft has a share of less than three percent.

Yahoo! Japan will switch to Google's search engine this year from the Yahoo! Inc. technology it currently uses and deploy Google's online advertising and distribution system, while maintaining its current user interface. In return, Yahoo! Japan will give Google data on online shopping or auction trends.