The Act aims to foster innovation and expand options for consumers through ensuring a fair and competitive environment in the digital field, Japan’s engine of economic growth to be. As application stores, etc., for smartphones – which have become important social infrastructure – are provided in oligopoly markets, the government needs to ensure that startups and other businesses, not only digital platform operators, can fairly and equitably enjoy the fruits of digital markets’ growth as well.
Japan Fair Trade Commission (JFTC)
Recently, Japan released its own legal framework, and it gets worse for tech giants. Although they didn’t call out any names, the Act states that JFTC will be in charge of identifying companies under this new law and ensuring compliance. In summary, it touches major consumer issues, and demands that updates to operating systems plus web browsers are fair.
One concern is on how app stores force you to use specific payment systems, and the need for different app stores to compete fairly while keeping people’s privacy and safety in mind. Also, companies are to stop pushing their browsers in your face, and make it easier for you to change default settings on your phones. Most of all, search engines shouldn’t place certain sites over others, and companies must be clear about how they collect and use people’s data.
Note: This publication is based on the tentative translation of the Act. The Act itself is not final and is subject to change by the JFTC.
Japan will hold tech giants accountable for their actions
According to the act, Companies must regularly submit reports showing they’re following the rules, which the JFTC checks and shares with the public. If needed, they can ask for more reports or give direct orders to make sure everyone plays fair. They investigate any wrongdoing and can order companies to stop if they find problems.
As if the EU-imposed fine wasn’t enough, the JFTC says that serious violations will attract fines up to 20% of company earnings. In the EU, there was a $40 billion penalty on Apple, equivalent to 10% of their $385.70 billion annual revenue in 2023. Despite these consequences, the top companies continue to defy compliance.
The bill will take effect within one and a half years after the Act is made public. Counting from the date of the announcement, we’re looking at December 10, 2025. However, the Cabinet Order will decide the specific date.
