In Japan, a new law, the Act on Promotion of Competition for Specified Smartphone Software, was adopted in June 2024. It targets tech giants like Apple and Google, and aims to make the smartphone-related markets which they dominate more competitive.
Title in Japanese: 「スマートフォンにおいて利用される特定ソフトウェアに係る競争の促進に関する法律」
Nicknames: the Smartphone Act aka the "Japanese version" of the DMA aka a mini-DMA
Text
in Japanese (Prof. Shiraishi's site)
Japan Fair Trade Commission Press Release when bill was proposed (ENG JP)
News coverage
Japan Times (22 May 2024), Asahi Shimbun (16 April 2024), NHK (12 June 2024, in Japanese)
Timing: proposed in April 2024, the bill quickly made its way through the Diet, with the House of Representatives approving it in May 2024 and the House of Councillors on 12 June 2024, resulting in the adoption (成立) of the law on 12 June 2024. Promulgated (公布) on 19 June 2024 and will become effective (施行) before the end of 2025.
Scholarly articles, blogs, etc. in English
My blog on the Smartphone Act
My colleague, Professor Takizawa, in an interview
A blog by Sangyun Lee and Alba Ribera Marínez
An article by Professor Wakui in the Journal of European Competition Law & Practice
A short article on the act and its impact on the FTC, written by JFTC staff member
Why?
The EU has something too
Apple and Google's stranglehold over app stores, search, mobile payment systems, etc.
competition law enforcement has been too slow to deal with these problems
Coverage: essentially Apple and Google, although technically, it is a bit more complex. The law says the JFTC will designate specific companies, active in one or more of the following markets:
mobile operating systems
app stores
browsers
search engines
For each of these four types of "software", the JFTC will designate the specific companies that will be covered by the law. This is expected to happen around spring 2025. It will do so if the companies exceed a certain scale. The scale thresholds are set in a cabinet order, which specified that the law will apply to services with more than 40 million active monthly users. Sounds complicated but, in mobile operating systems, for instance, everyone expects the JFTC to designate Apple (iOS) and Google (Android). For app stores, we can expect Apple's App Store and Google Play to be designated. For search engines, I expect Google search to be designated. For browsers it will probably be Chrome and Safari.
What does the law do? The law contains a series of do's and dont's = "ex ante" regulation. Here are the key ones
❌ don't ban other app stores: Apple and Google will have to allow other app stores on iPhones and Android phones. But direct downloads from websites (so-called sideloading) can still be blocked.
❌ don't force developers to use your own payment systems: Apple and Google will have to allow other payment systems than Apple Pay and Google Pay (Art. 8(1))
❌ no anti-steering = apps such as Spotify can tell users that they can get a cheaper subscription via the Spotify website (Art. 8(2))
❌ don't force smartphone makers to install your own brower (Art. 8(3))
✅ do make default smartphone settings easy to change (Art. 12)
❌ no self-preferencing in search results (Art. 9)
❌ don't use data acquired about competing apps for your own apps (Art. 5)
❌ don't prevent app developers from using OS functionalities that your own apps are allowed to use (Art. 7(2))
Effective: within 18 months of promulgation of the law (possibly sooner), so probably somewhere near the end of 2025.
Enforcement by the JFTC: compliance reports from the companies, monitoring by the JFTC, possibility to settle an investigation through commitments (確約計画). Also possible, but likely only used if all else fails: a cease-and-desist order (排除措置命令) and, for certain provisions, penalties (課徴金納付命令 )
Private enforcement: app developers or other companies harmed by violations can seek injunctive relief and damages. Good luck!
Penalties for violations: Companies face fines up to 20% of their Japanese revenue generated by the product in question, but only for violations of Articles 7 and 8.