IT Industry in Japan Sets Rules for Tech Companies Regarding Smartphone Apps
The Japan Fair Trade Commission has finalized guidelines aimed at promoting fair competition in the smartphone app market, specifically targeting IT giants like Google LLC and Apple Inc. The new guidelines, set to take full effect in December 2025, are a response to concerns about competition in the app market and are expected to be officially announced soon.
The guidelines impose several requirements on Google and Apple. These companies are banned from favoring their own app stores over third-party app stores on their mobile operating systems, ensuring a fair playing field for other app stores.
Moreover, app developers must be granted access to critical operating system features, such as voice calls and biometric authentication, that are necessary to develop and operate apps. The law also mandates openness in areas where some functions, like email on external devices, are currently restricted.
The new law also prohibits IT giants from using data obtained via their operating systems to develop products that confer competitive advantages harmful to others. This aims to prevent leveraging privileged OS data for anti-competitive purposes.
The law also prohibits hampering the use of alternative payment systems within apps. This means that Apple and Google will be required to allow third-party payment options besides their own, facilitating competition on transactional services in apps.
Consumers must also be allowed to select from multiple search engines when purchasing new devices, increasing user choice and reducing default biases. Additionally, the guidelines discourage IT giants from excluding other companies' app stores from their platforms.
Apple has expressed concerns about the law, voicing worries about privacy, security, and risks arising from compelled technology and user data sharing. The impact of the law on the app market competition remains to be seen, as it is unclear how the law will be enforced and what penalties may be imposed for non-compliance.
The law applies specifically to smartphones using Apple and Google's operating systems and does not specify whether it applies to smartphones outside of Japan. The Japan Fair Trade Commission accepted public comments on the guidelines until June 13.
In sum, the law requires Google and Apple to open their platforms to fair competition by enabling greater access for third-party developers, forbidding discriminatory practices, and preventing monopolistic control over app store payments, OS functionalities, and default user choices. The guidelines are a significant step towards promoting a more competitive app market in Japan.
The guidelines mandate IT giants, like Google and Apple, to allow users to choose from multiple search engines when purchasing new devices, promoting user choice and reducing default biases. This also extends to app stores, as the law prevents these companies from excluding other companies' app stores from their platforms.
Furthermore, the law requires Apple and Google to allow third-party payment options within apps, ensuring competition on transactional services and discouraging monopolistic control over app store payments.
Moreover, app developers, including photographers, businesses, and finance professionals, will be granted access to critical operating system features necessary for app development and operation, fostering innovation and fair competition in the smartphone app market.
