New Law Expected to Rectify IT Giants’ Dominance in Digital Market; Discussions on Boosting JFTC Expected

By Yasuaki Kobayashi / Yomiuri Shimbun Staff Writer

14:45 JST, June 13, 2024

Wednesday’s enactment of a law aimed at regulating questionable activities of information technology giants will set new regulations in motion. The new legislation will enable Japan to catch up with the European Union and the United Kingdom in regulating IT giants and is expected to help weaken their grip on the market.

The Japan Fair Trade Commission will proceed with building an appropriate competition environment in the digital market by increasing the number of personnel engaged in the field.

“IT giants have overwhelming influence, so we have had no choice but simply following what they dictate until now. We hope the government will make full use of the new law and realize fair business,” said Takamasa Kishihara, managing director of the Mobile Content Forum, an app industry group.

He said the app industry has been increasingly frustrated with the various restrictions imposed by Apple Inc. and other IT giants.

For IT giants, tightened regulations could result in reduced earnings. In the EU, which was first to fully implement a new law designed to keep a check on IT giants, there are already moves trying to water down the regulations. Apple, for instance, indicated its intention to set up a separate fee for developers when they use other firms’ app stores.

“IT giants may try to outwit the regulations. We cannot be off our guard,” Kishihara said.

In response to the passage of the new law, Apple released a comment saying it will work closely with the JFTC, although it has concerns about the new law’s impacts on security among other issues, hinting at its opposition to the new law that stipulates the operation of competing app stores.

Google LLC announced that it will deepen constructive discussions with the government and those concerned in the industry.

The number of JFTC officials involved in the new legislation is 14 at present. But full-fledged discussions are expected for bolstering the JFTC. In a draft unveiled Friday of a revised action plan for Prime Minister Fumio Kishida’s “new capitalism” initiative, the government incorporated a plan to comprehensively boost the JFTC’s structure in terms of both quality and quantity in connection with the new law.