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If companies are making huge profits in the Japanese market, it makes sense that even foreign firms should comply with domestic laws and regulations.
The Justice Ministry said it has asked a court to impose fines on seven overseas tech companies operating in Japan for failing to meet the requirements to register their overseas global headquarters. According to the ministry, this is the first time it has taken such an action. The names of the companies in question have not been disclosed.
Japan’s Companies Law requires foreign companies that continually conduct business in Japan to register not only their Japanese units but also their headquarters in foreign countries. The law stipulates that a violator will be fined up to ¥1 million.
Forty-eight overseas tech companies that have reported to the Japanese government as telecommunications carriers had failed to register their overseas global headquarters. They included U.S. firms such as Google, Twitter and Meta Platforms Inc., formerly known as Facebook.
Although the Japanese government has continued to request the registrations since March, only eight companies have complied. It is a problem if foreign companies are disrespecting Japanese laws and regulations.
About 30 companies have finally showed a positive stance toward the request, but the seven firms in question have said they will not register their overseas global headquarters, the ministry said.
Social media and search services provided by overseas tech companies have become infrastructure indispensable to our daily lives. These companies also reportedly collect vast amounts of data from users through their free services and make huge profits based on that data.
They should register as required and fulfill their responsibilities in line with their business in Japan.
The government is asking them to register to make it easier for victims who have been defamed on the internet to demand compensation from people who posted harmful messages.
In order to file a civil suit, it is necessary to ask social media and other service providers to disclose information and identify who posted the harmful messages.
Japanese units of overseas tech companies are believed to often not respond to such requests for the disclosure of information. For that reason, unless overseas tech companies are registered in Japan, victims who plan to file a suit have to check the addresses and other information of a firm’s overseas headquarters and send complaints there. The burden on victims is great. If the companies are registered in Japan with Japanese addresses, victims have only to send the complaints to the local addresses.
However, it is unclear whether thorough registration will be sufficient to curb online defamation.
Overseas, the European Union is seeking to enforce the Digital Services Act to require giant tech companies to respond to illegal content.
The United States is also debating whether to hold tech companies responsible, as a measure to combat false information.
In Japan, an expert panel of the Internal Affairs and Communications Ministry recommended in June that a framework be established to require tech companies to disclose information on how to deal with harmful information. Preventing harmful information from being posted on the internet is a social issue. There is an urgent need to consider building an effective system for that purpose.
