#Japan #Tokyo #Apple #Google #Software Competition

The New Era of App Distribution in Japan

On December 18, 2025, Japan will fully enforce the Smartphone Software Competition Promotion Law, aiming to boost innovation and fair competition in the realm of mobile applications. This comprehensive legislation addresses monopolistic practices in the mobile ecosystem and seeks to create a system that allows for a diverse range of stakeholders to flourish.

One of the key elements of this law is the prohibition of actions that hinder the provision of alternative app stores and alternative payment methods. It also addresses the utilization of related web pages. The enactment of this law is a significant step forward, as it introduces essential measures for constructing a free and fair market in smartphone software, and it is commendable to see the Japanese government, particularly the Japan Fair Trade Commission, taking timely and comprehensive actions.

However, the effectiveness of the law in delivering the desired impacts remains contingent upon future efforts. Industry groups, including the MCF, are committed to closely monitoring developments related to this law, recognizing its critical significance.

With the full implementation of this law, both Apple and Google will now, for the first time, allow developers to display sales information on related web pages, including product descriptions and promotional details. Previously, this capability was restricted, creating a landscape dominated by unilateral rules. The permission to share such information opens opportunities for developers to directly communicate with consumers, thus facilitating a variety of growth models and enhancing consumer choice.

Concerns About New Regulatory Provisions

While the new regulations from Apple and Google are heralded for some advancements, various challenges persist regarding fees and contract terms. There are strong concerns that these may violate the principles established in the Smartphone Software Competition Promotion Law, particularly in relation to the use of alternative payment methods and related web pages.

1. Prohibition of Fees: To establish a fair competitive environment, users should not incur charges for utilizing alternative payment methods or for accessing related web pages. Despite this, the new regulations impose unclear fees, effectively hindering alternative processes. This constitutes an abuse of dominant position and is viewed as a violation of Article 8 of the law.

2. Incongruent Conditions: The conditions under which developers must track user transactions on these web pages are not only unreasonable but also infringe on consumer privacy by imposing burdensome financial conditions. This could lead to a situation where the absence of economic incentives for using alternative payment methods perpetuates the existing structures that prioritize company profits over consumer and developer welfare.

3. Privacy Violations: The requirement for developers to track user activities to report transactions over a 7-day or 24-hour period is deemed unfair and contradictory, potentially violating privacy protections that have been staunchly advocated by the designated firms until now.

4. Unnecessary Payment Method Enforcement: For products and services not even utilizing the relevant payment systems, mandatory use of designated payment systems is unjustified and constitutes an abuse of power, breaching Article 8 of the law.

Additionally, there are instances of non-compliance with the law in the newly revised regulations imposed by the designated companies. For example, Apple’s guidelines clearly stipulate that digital items within apps must also be available for purchase via alternative payment methods, despite there being cases where such practices are still effectively prohibited.

Looking Forward

It is essential that the Japanese government takes prompt corrective actions regarding the existing provisions that violate the newly established law. The industry is watching closely to ensure that fair use conditions are established, thus protecting consumer interests and fostering an innovative ecosystem. Further discussions and disclosures regarding alternative app marketplaces and other related challenges are expected to surface as the landscape evolves.

In conclusion, the full enforcement of the Smartphone Software Competition Promotion Law is a pivotal moment for Japan's mobile development environment. While much progress is anticipated, the path ahead requires vigilant oversight and a commitment to uphold the principles of fair competition—ensuring that app developers flourish and consumers benefit from a richer, more diverse digital marketplace.