Japan aims to strengthen antitrust laws against Apple and Google

[Alfonso Maruccia]

Something to look forward to: Lawmakers around the world have begun to exhibit a more proactive stance toward openness and competition in mobile ecosystems. Apple and Google, the companies controlling the global mobile market with their respective operating systems, will face heightened scrutiny and stricter penalties if they violate regulations.

According to a new report by Nikkei Asia, Japanese authorities are poised to toughen their antitrust regulations, posing a significant challenge to incumbents in the mobile market. The publication revealed that penalties aimed at curbing monopolistic practices will see a substantial increase, with fines more than tripled compared to current antitrust laws.

The new antitrust legislation is being drafted by Japan's Fair Trade Commission (FTC) and is squarely aimed at the mobile ecosystems of Apple and Google. Big Tech corporations will be compelled to allow third-party app stores and alternative payment methods within their closed ecosystems, or face fines of up to 20 percent of their revenue in the country.

According to Nikkei Asia, further violations could lead to a maximum fine of 30 percent of a company's revenue. Mobile app stores generate significant revenue for Big Tech companies, and previous antitrust laws in Japan were criticized for being too lenient in addressing predatory practices in app stores and the substantial share collected by these companies on sales from third-party apps.

Apple's rules for the iOS store entail a 15 percent cut from app sales, while developers earning over $1 million annually face a 30 percent contribution to Cupertino's coffers. Google adopts a similar model, taking a 15 percent cut on the initial $1 million earned by three percent of app makers, with developers surpassing this threshold obligated to pay a 30 percent fee annually.

Japan's FTC is anticipated to present a comprehensive draft of the new antitrust regulations to lawmaker groups, including the Liberal Democratic Party's economy and industry unit. Parliament members could deliberate on the draft as soon as this month, potentially reshaping Japan's mobile market and compelling Apple and Google to overhaul their business practices, much like they've had to do in other parts of the world.

In Europe, the newly ratified regulations of the Digital Markets Act aim to propel the continent's mobile market into an era of app sideloading, increased store competition, and enhanced consumer protection. Meanwhile, in the US, antitrust lawsuits have been filed against Google and Apple. Mountain View recently settled a case brought by US states and Washington DC with a $700 million payout, while Cupertino faces legal action from 15 states and the Department of Justice.

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Japan aims to strengthen antitrust laws against Apple and Google

 

[toooooot]

They are doing good work.

 

[Dreadcthulhu]

Good for Japan, though I can think of two major Japanese companies who also co-dominate a large, digital marketspace, and also have artificially closed off ecosystems with their devices. Ideally this law would be written broadly enough to force those two companies to also allow "third-party app stores and alternative payment methods within their closed ecosystems" as well, though that is probably asking for too much. (I am of course talking about Nintendo & Sony, who dominate the game console market, and lock down their systems in a manner very similar to what Apple is doing).

 

[Theinsanegamer]

Good for Japan, though I can think of two major Japanese companies who also co-dominate a large, digital marketspace, and also have artificially closed off ecosystems with their devices. Ideally this law would be written broadly enough to force those two companies to also allow "third-party app stores and alternative payment methods within their closed ecosystems" as well, though that is probably asking for too much. (I am of course talking about Nintendo & Sony, who dominate the game console market, and lock down their systems in a manner very similar to what Apple is doing).

Agreed, but counterpoint: Google and Apple are selling physical devices with a variety of productivity uses, and are considered necessary (you need a phone in todays day and age).

Gaming is not considered a necessity. Their physical devices are meant purely for entertainment consumption.

 

[m4a4]

Good for Japan, though I can think of two major Japanese companies who also co-dominate a large, digital marketspace, and also have artificially closed off ecosystems with their devices. Ideally this law would be written broadly enough to force those two companies to also allow "third-party app stores and alternative payment methods within their closed ecosystems" as well, though that is probably asking for too much. (I am of course talking about Nintendo & Sony, who dominate the game console market, and lock down their systems in a manner very similar to what Apple is doing).

Console companies are not comparable to "smartphone" companies.

Android and iOS are general purpose OS's and should not be locked down in such an anti-competitive/consumer way.

PS5 and Switch OS's are for gaming. It doesn't make sense to treat them the same. Though, they should definitely be made sure to not abuse their positions in their own corner...

 

[Dreadcthulhu]

Console companies are not comparable to "smartphone" companies.

Android and iOS are general purpose OS's and should not be locked down in such an anti-competitive/consumer way.

PS5 and Switch OS's are for gaming. It doesn't make sense to treat them the same. Though, they should definitely be made sure to not abuse their positions in their own corner...

Apple would probably disagree with your assertion that iOS is a general purpose OS; and argue that it is a special purpose OS made just for Apple devices, that is only ever intended to run Apple Approved Software, just like Sony would claim that the Playstation OS is only intended to run Sony approved programs (which are more than just games, they do have stuff like streaming apps and whatnot) - that is the crux of the issue here. Google of course does not lock down Android as much, but has its own anti-completive issues going on.

And just because Sony and Nintendo claim that the devices they make are to only be used for gaming, it does not mean they should be able to block the actual owners from doing other stuff with them. The hardware inside a PS5 is not much different than what you find in a normal PC, and all sorts of useful software could easily be ported to it if it allowed sideloading. The Switch hardware, while not all the powerful, could at the least run anything that works on an older Android phone. Stuff like ebook readers would work just fine on a Switch, but Nintendo does not allow.

Edit - to expand on this, I think there should be a more broad, simple law that states that device makers are not allowed to use cryptographic means to stop the actual owners of said devices from using them with third-party software or hardware. This would not only prevent personal electronics makers from engaging in such shenanigans, but also would prevent other companies from doing such things, like tractor makers or train manufacturers, to name some recent example.

 

[m4a4]

Apple would probably disagree with your assertion that iOS is a general purpose OS; and argue that it is a special purpose OS made just for Apple devices, that is only ever intended to run Apple Approved Software, just like Sony would claim that the Playstation OS is only intended to run Sony approved programs (which are more than just games, they do have stuff like streaming apps and whatnot) - that is the crux of the issue here. Google of course does not lock down Android as much, but has its own anti-completive issues going on.

And just because Sony and Nintendo claim that the devices they make are to only be used for gaming, it does not mean they should be able to block the actual owners from doing other stuff with them. The hardware inside a PS5 is not much different than what you find in a normal PC, and all sorts of useful software could easily be ported to it if it allowed sideloading. The Switch hardware, while not all the powerful, could at the least run anything that works on an older Android phone. Stuff like ebook readers would work just fine on a Switch, but Nintendo does not allow.

Edit - to expand on this, I think there should be a more broad, simple law that states that device makers are not allowed to use cryptographic means to stop the actual owners of said devices from using them with third-party software or hardware. This would not only prevent personal electronics makers from engaging in such shenanigans, but also would prevent other companies from doing such things, like tractor makers or train manufacturers, to name some recent example.

I can agree with you that they shouldn't be locking out people from jailbreaking their owned hardware, but it's still a different category altogether. Smartphones/PCs ≠ consoles (and vice versa). I'd rather specific antitrust laws be made per category, instead of broad (useless) laws.

There's a biiiig difference between locking out the install of custom OS's (for consoles), and preventing 3rd party apps on the OS (smartphones). You seem to be all over the place.

 

[The Talking Tech]

Console companies are not comparable to "smartphone" companies.

Android and iOS are general purpose OS's and should not be locked down in such an anti-competitive/consumer way.

PS5 and Switch OS's are for gaming. It doesn't make sense to treat them the same. Though, they should definitely be made sure to not abuse their positions in their own corner...

A monopoly is a monopoly no matter the shape or form....so yes Sony and Nintendo should also be looked into as well.

 

[p51d007]

Never had an Apple device, and I don't really care for locked down ecosystems, but
it does make it harder to break their system to introduce spyware, virus garbage etc.

 

[daffy duck]

Never had an Apple device, and I don't really care for locked down ecosystems, but
it does make it harder to break their system to introduce spyware, virus garbage etc.

That was once true, but Apple and even Linux are now open game and suffering lots of attacks. It's not as a big a problem when you have minuscule OS share compared to Windows though.