Japan demands court fine 7 unregistered foreign tech companies

Yomiuri Shimbun file photo
The Justice Ministry

The Justice Ministry has requested the Tokyo District Court to levy fines on seven foreign tech companies operating in Japan for failing to properly register in violation of the law, it said Friday.

The move — the first such action taken by the ministry — is aimed at promoting measures dealing with online defamation. The court will make the final decision on whether to impose fines on the firms in question.

The Companies Act requires foreign companies doing business in Japan on a continuing basis to register the location of their head office located overseas. Violators face a fine of no more than ¥1 million.

In March, the Justice Ministry and the Internal Affairs and Communications Ministry demanded that 48 companies that had applied to the latter as telecommunications operators but failed to register their head offices to do so. Among the companies were Google LLC, Meta Platforms, Inc. (formerly Facebook, Inc.) and Twitter, Inc.

The ministries repeated the demand on June 3, but seven operators replied that they would not provide the information. In response, the Justice Ministry on Thursday notified the court of the matter and requested the fines.

The Justice Ministry has withheld the names of the seven companies, citing that “doing so could impair their rights and legitimate profits.” Google, Meta and Twitter are not among them, according to sources.

Meanwhile, eight companies have responded to the demand and have either completed the registration or have begun the application process. Except for two firms that have withdrawn from the telecommunications business, the remaining 31 companies are said to be willing to be in compliance. The Justice Ministry has told them to do so by July 22.

When the head office of a foreign company remains unregistered, it can delay recovery from damages in cases of online defamation.

To identify the person who posted abusive online comments, the victim needs to request that the internet platform operator disclose the abuser’s information. However, if the company is unregistered, undue time and effort is required to retrieve such information from overseas and send complaints and other legal documents to the operator’s head office.

As online defamation becomes an increasingly serious social issue in Japan, lawyers and others have called for measures to tackle the situation. An emergency proposal by the Liberal Democratic Party issued last June also pointed out the need for total compliance with the registration law.

“With more companies registered, court proceedings will be expedited, making it possible for quick restitution from damage,” said Yoichiro Itakura, a lawyer well-versed in IT issues. “Perhaps stronger measures are necessary in the future, such as increasing the fine and allowing the authorities to be more forceful about the registration.”