Japan antitrust regulator targets Apple, Google’s duopoly in mobile app market

Image Source: Reuters

The Japan Fair Trade Commission on Thursday announced the findings of its investigation into the mobile OS and app distribution service market in the country, saying Apple and Google’s businesses don’t face enough competition pressure.

As part of the investigation, which was first launched in October 2021, the JFTC said it surveyed app developers, consumers (through research companies), interviewed business operators and business association including smartphone manufacturers, and ‘’exchanged opinions’’ with the Australian Competition and Consumer Commission (ACCC), Competition & Markets Authority of the United Kingdom (CMA), as well as the Directorate-General for Competition of the European Commission (DG COMP).

According to the report, Android’s market share of mobile operating systems in the country is 53.4%, while iOS accounts for the remaining 46.6%. When it comes to app stores’ revenue, Apple’s share is 100% and Google’s share is around the high 90% range, the JFTC said.

To enhance competition, prevent self-prevencing and violations of Japan’s Antimonopoly Act (AMA), the competition regulator made several recommendations for the tech giants, such as providing access to third party app stores and alternative payment methods, as well as enabling sideloading ‘’if there is no problem in terms of security and privacy protection’’.

After facing legal challenges in different markets, both Google and Apple have eased their limitations on alternative payment systems. Google introduced its ‘’User Choice Billing’’ pilot program last year, which recently has been expanded to the US, Brazil & South Africa, allowing developers to offer third party methods in addition to its own billing system. However, the program doesn’t completely free developers from paying the controversial in-app purchase fee, but reduces it from 15% to 11% instead. While Apple hasn’t launched a similar program yet, it now lets apps in South Korea and dating apps in Netherlands to offer different payment options, reducing its fee from 30% to 27% in the first, and to 26% in the latter market.

Meanwhile, unlike Google, Apple currently doesn’t allow sideloading and third party app stores. But the iPhone-maker is reportedly getting ready to lift its restrictions in the European market in order to comply with the Digital Markets Act.

The JFTC’s other suggestions include offering third party developers access to same OS features and information regarding app store updates, not using data generated from third party apps to develop competing apps, not imposing technical or other types of limitations on mobile users when they switch apps and services, respecting their preferences by displaying choice screens, being more transparent about app store operation costs and revenue, rankings, search results, recommendations, etc.

The regulator added that ‘’while it is desirable for Google and Apple’’ to take these measures, ‘’it is effective to secure them by law to the extent necessary to ensure the effectiveness of measures’’.

The report comes days after the National Telecommunications and Information Administration of the U.S. Department of Commerce revealed the findings of its investigation, which it launched in 2021 after an executive order from Joe Biden. According to the NTIA’s report, Google and Apple play a ‘’significant gatekeeping role by controlling (and restricting) how apps are distributed’’.

Meanwhile, after a year-long market research, the UK’s CMA said in June last year that Google and Apple ‘’hold all the cards’’ in the mobile ecosystem market. In November, it launched another investigation into the companies’ mobile browser dominance.

Google is also currently facing an antitrust lawsuit by the U.S. Department of Justice and eight states over its dominance in digital ad tech.

Written by Tuna Cetin


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