Japanese App Developers Condemn Apple, Google for New Commissions on Out-of-App Billing; JFTC Called on to Investigate

Yomiuri Shimbun file photo
The Fair Trade Commission head office in Chiyoda Ward, Tokyo

An industry group comprising Japanese app developers claimed that measures taken by Apple Inc. and Google LLC violate a new law aimed at facilitating external payment processing, among other things, in a statement released Thursday.

The Mobile Software Competition Law, which came into full force in December, forces tech giants — primarily Apple and Google — to allow app companies to direct users to external sites for cheaper payments when purchasing app features or content.

In response, the two companies introduced new commissions on out-of-app billing. Apple’s new commissions were up to 15% while Google’s new commissions were up to 20%.

Mobile Content Forum, which comprise about 70 companies, condemned the new commissions and asked the Japan Fair Trade Commission (JFTC) to “enforce the law appropriately.”

The industry group said the two companies’ commissions were “unjustifiable and disrupt the use of external sites.” As a result, the group pointed out, the burden app companies have to shoulder has not been sufficiently reduced, and out-of-app billing has not become a viable alternative.

The group argued that the companies’ measures violate the new law because it prohibits them from obstructing external payment processing.

The group also pointed out that Apple and Google are forcing app companies to track and report the behavior of consumers that visit external sites so that the commissions can be charged. It criticized the tech giants, saying that they “prioritize profit over consumers’ privacy.”

Expectations had been high that the new law would lead to lower app prices. However, there are now growing concerns that the effect will be limited.

The JFTC is required to investigate possible violations of the legislation. “We want to listen to various opinions from related parties and then discuss what actions we should take,” a JFTC official said.