Diet OK’s Bill to Promote Smartphone App Competition

Yomiuri Shimbun file photo
The Diet Building in Chiyoda Ward, Tokyo

TOKYO (Jiji Press) — The Diet passed into law on Wednesday a bill to promote competition over smartphone apps.

The legislation, apparently aimed at regulating activities of information technology giants such as Google LLC and Apple Inc., was approved at the day’s plenary meeting of the House of Councillors. It cleared the House of Representatives last month.

The new law bans acts of blocking new entrants to the app store and other smartphone software markets in a bid to ensure a level playing field. Violators will face a fine equivalent to 20% of their sales from the areas of business concerned in Japan.

The law is expected to give app users more options and may lead to cheaper and higher-quality services. It may also better protect app developers, whose earnings have been squeezed by high fees imposed by IT giants, industry sources said. The law also covers search engines, operating systems and browsers.

The rate of fine is 30% for repeated violations to enhance the effectiveness of the regulations. Japan’s antimonopoly law sets a fine equivalent to 6% of sales for acts to block new market entries.

The law, which will take effect within 18 months, calls on IT giants to report their compliance annually. It is designed to align Japanese regulations with those in other advanced countries.

In March, the European Union started to fully implement its digital markets law, which is intended to keep a check on IT giants. In the United States, a series of lawsuits have been filed against IT giants for allegedly breaching the country’s antitrust law.