Japan To Crack Down on Apple and Google App Store Monopolies

Japan is preparing regulations that would require tech giants like Apple and Google to allow outside app stores and payments on their mobile operating systems, in a bid to curb abuse of their dominant position in the Japanese market. From a report: Legislation slated to be sent to the parliament in 2024 would restrict moves by platform operators to keep users in the operators' own ecosystems and shut out rivals, focusing mainly on four areas: app stores and payments, search, browsers, and operating systems. The plan is to allow the Japan Fair Trade Commission to impose fines for violations. If this is modeled on existing antitrust law, the penalties would generally amount to around 6% of revenue earned from the problematic activities. The details will be worked out this spring.

The government will determine which companies the legislation applies to, based on criteria such as sales and user numbers. It is expected to affect mainly multinational giants, with no Japanese companies likely to be caught in the net. Apple does not allow apps to be downloaded onto iPhones through channels other than its own App Store. In-app payments also must go through Apple's system, which takes a cut of up to 30%. And although Google permits third-party app distribution platforms, it still requires apps to use its billing system. These effective monopolies on in-app payments can lead to users paying more for the same content or services on mobile devices than on personal computers.

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