Japan introduces bill aiming tech giants

The Japanese government is set to introduce a new bill targeting tech giants like Apple and Google in an effort to break market monopolies.

The Japanese government is gearing up to submit a new bill targeting tech giants and monopolies such as Apple and Google during the upcoming ordinary Diet session, scheduled to commence in late January.

The focus of the proposed legislation centres on the smartphone-related market, which is currently dominated by Apple Inc. and Google LLC. The government aims to counter this perceived monopoly, which has raised criticisms for hindering market dynamics. The primary objectives of the regulations are to foster market competition, reduce usage fees, and encourage service diversification.

The forthcoming bill is expected to mandate IT giants like Apple to open up their mobile app marketplaces to third-party entrants. Additionally, a key provision will prohibit these tech companies, including platform operators, from compelling app developers to use their proprietary settlement systems. Oversight and enforcement of the new regulations will fall under the purview of the Fair Trade Commission.

A major contention revolves around Apple’s closed ecosystem, where users of iPhones are limited to downloading apps exclusively from the Apple App Store. This practice has been criticized for impeding fair competition. Furthermore, Apple imposes a fee of up to 30% on app revenue generated by developers using its marketplace, a fee that has faced scrutiny for being excessively high.

The European Union has taken a leading role in regulating large IT firms through the Digital Markets Act, which mandates designated companies to open up their app marketplaces. Compliance with these regulations is required from March, setting a precedent for global tech governance.

Japan’s government plans to finalize the details of the bill after closely observing how tech giants respond to the EU’s regulatory framework. The move signifies a broader global trend where governments are increasingly seeking to curb the dominance of major tech players to promote fair competition, protect consumers, and stimulate innovation.

By introducing these regulatory measures, Japan aims to create a more level playing field in the tech industry, fostering a competitive environment that not only benefits consumers through lower usage fees but also encourages innovation and a diverse range of services. The evolving landscape of global tech regulation suggests that countries are recognizing the need for proactive measures to ensure fair practices and prevent market monopolies in the ever-expanding digital realm.