Japan follows EU in blocking Apple and Google's anti-competitive app store practices

Third party app stores and billing providers are on their way to Apple iOS and Google Android in Japan, thanks to a new law designed to stimulate competition.

Nick Wood

June 13, 2024

3 Min Read

The Fair Trade Commission (FTC) said that under the Act on Promotion of Competition for Specified Smartphone Software, the likes of Apple and Google – described by the act as 'designated providers' – are not allowed to stop rivals from operating app stores and payment services that compete with their own.

Designated providers are also not allowed to engage in preferential treatment of their services over those of competitors when it comes to displaying search results. They must also ensure that third parties have access to the same iOS and Android features and functions as developers using the native app store.

The law has been passed by Japan's House of Councillors and will take effect within the next 18 months, the FTC said.

Non-compliance will attract a fine of 20% of turnover generated in Japan, which – according to a report by Kyodo – rises to 30% if the anticompetitive practice doesn't cease.

The FTC said the new legal framework brings Japan into lockstep with the EU's Digital Markets Act (DMA), as well as the lawsuits filed by the US Department of Justice (DoJ) against big tech, and the UK's Digital Markets, Competition and Consumers Act.

The development was welcomed by Epic Games founder and CEO Tim Sweeney, who famously took Apple to court in the US over its restrictive App Store policies. He said the decision means Epic plans to re-release its wildly-popular Fortnite game on iOS in both Japan and the UK next year.

However, based on how things are going in the EU, enacting the law is merely the opening salvo of an arduous campaign to compel Apple and Google to comply fully with the spirit of the new regulations.

The Digital Markets Act (DMA) has been in effect since May last year. Similar to Japan, the rules are designed to curb the anticompetitive tendencies of the biggest fish – Apple, Amazon, Google parent Alphabet, Meta, Microsoft, and TikTok parent ByteDance – all of which have been designated as gatekeepers for their inherent ability to exert control over content, applications and products to their advantage and by extension to the detriment of smaller rivals.

When it comes to app stores, the DMA mandates that app store owners operating in the EU allow developers to promote and sell their wares using third-party marketplaces and payment processors.

That's the dream, anyway, but the reality appears to be that Google and in particular Apple are working overtime to ensure they just barely meet the threshold of compliance.

While both have allowed developers to make use of rival app stores and payment providers, there are a discouraging number of hoops that end users must jump through in order to actually install an app that resides beyond the confines of the App Store or Play.

The European Commission in March also launched a 12-month investigation into concerns that Apple and Google – as well as Meta – are not meeting their DMA obligations.

Apple is being probed for allegedly placing restrictions on the choice of browser and search engine in iOS, while Google stands accused – yet again – of prioritising its own products and services in search results over those offered by third parties.

Hopefully the Japanese government will have been following these developments, and will be well prepared to counter any potential monkey business when its own regulations come into force next year.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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