Japan Govt to Introduce Law Opening Up Apple, Google App Stores to Competition

The Yomiuri Shimbun

17:53 JST, April 26, 2024

The government approved at a Cabinet meeting Friday a new bill requiring companies such as Apple and Google to open up the app stores to competition. The government aims to pass the bill during the current Diet session. If approved, the bill is expected to be fully implemented by the end of 2025.

The envisaged new law establishes various prohibitions and obligations for app store operators to promote the competition of smartphone software. The law aims to prohibit Google from prioritizing its products and services in its search results and open up Apple’s App Store to other companies, among other things.

If a company violates the envisaged law, the Fair Trade Commission (FTC) will impose a fine worth 20% of domestic sales in the relevant field. The monetary penalty is a significant increase from the current fine set at 6% under the Antimonopoly Law. The goal is to force the two IT giants to comply with regulations.

With the smartphone operating system market dominated by Apple’s iOS and Google’s Android, the various restrictions imposed by the two IT giants on app distributors and other companies have become an issue.

Some observers say the lack of competition has led to high fees paid by consumers. “The bill will create a competitive environment to expand consumer choice by stimulating innovation of areas such as the app stores,” said consumer affairs minister Hanako Jimi, who is in charge of the commission, at a press conference after the Cabinet meeting Friday.

Other provisions in the new bill include the prohibition on unfair and discriminatory treatment of app distributors. It also prohibits app store operators from using acquired data for services that compete with app distributors.

IT giants will be required to submit annual regulatory compliance reports, and the commission is to monitor them to ensure that they are complying with the regulations.