Japan is set to join the European Union in challenging the dominance of major tech companies over app distribution. On Wednesday, Japan's House of Councillors approved a law aimed at prohibiting Apple and Google from blocking third-party app stores on their devices. This legislation had already cleared the House of Representatives in May.
Aiming for Fair Competition
The primary goal of this new law is to facilitate competition within the app marketplace, potentially leading to lower app prices for consumers. Japanese authorities believe that Apple and Google operate as a duopoly, imposing high fees on developers, which are then passed on to users.
In addition to allowing third-party app stores, the law prohibits these tech giants from prioritizing their own services over others. This aspect of the law is expected to impact Google significantly.
Penalties for Non-Compliance
Companies that violate the new regulations will face substantial fines. Initial fines can reach up to 20% of the domestic revenue generated by the offending service, increasing to 30% if the behavior persists. The Fair Trade Commission (FTC) of Japan will oversee enforcement, selecting which firms are subject to these rules and requiring them to submit annual compliance reports.
Although not explicitly stated, it is anticipated that both Apple and Google will be required to comply with the new law. The Japan FTC is not expected to impose these regulations on any Japanese firms.
Timeline and Background
The law is expected to take effect by the end of 2025. It originated from a Competition Assessment of the Mobile Ecosystem conducted by the Digital Market Competition Council of Japan's Diet, the collective name for the country's two parliamentary chambers. The bill was first proposed in 2023.
Apple has not yet commented on the new law, though it previously defended itself against antitrust allegations during the assessment period.
What This Means for Consumers and Developers
For consumers, this new law could mean access to a wider variety of apps at potentially lower prices. For developers, it could reduce the fees they pay to distribute their apps, allowing them to invest more in innovation and development.
As Japan moves forward with this significant regulatory change, the tech world will be watching closely to see how Apple and Google adapt to this new competitive landscape.
