Cabinet approves smartphone software competition promotion bill to regulate major tech companies – Impress Watch

On the 26th, the government approved a new bill aimed at regulating major tech companies such as Google and Apple, which produce smartphone operating systems.

The Cabinet-approved “Act on Promoting Competition with respect to Specified Software Used on Smartphones” is based on the fact that smartphones have become the basis of people’s lives and economic activities, and that their operating systems, app stores, browsers, search engines, etc. The aim is to ensure a competitive environment in the “software” market.

While they are as important as social infrastructure, such as smartphone operating systems and browsers, they are dominated by major operators. When major businesses restrict competition, a fair and free competitive environment is lost, but in these huge markets it is difficult to make voluntary corrections through new entry. Additionally, individual measures under the Antimonopoly Act would take a long time, making it difficult to restore fair and free competition. To this end, we aim to create an environment that enables the market to be revitalized through competition and the selection of diverse services, while ensuring the security of smartphone operating systems, browsers, app stores, etc.

Specifically, the Fair Trade Commission designates businesses that provide “specified software” such as operating systems as regulated businesses for each type of software if their business exceeds a certain scale. business person).

Designated business operators are prohibited from certain acts (prohibited matters) and are required to take certain measures (observance matters). The main prohibitions and compliance items include “Do not interfere with the provision of app stores by other businesses,” “Do not interfere with the use of other billing systems,” and “Make it possible to change default specifications with a simple operation.”

• [Main prohibitions and observances]
• Must not prevent other businesses from offering app stores
• Must not prevent the use of other billing systems
• It must be possible to change the default settings with a simple operation, and a selection screen for browsers, etc. must be displayed.
• In search, your company’s services must not be given priority over the services of competing companies without justifiable reason.
• The data obtained must not be used to provide competitive services.
• App operators must not be prevented from using functions controlled by the OS with the same performance as their own companies.

Designated businesses will be required to submit annual reports. If a violation is found, in addition to recommendations and orders, the law includes measures such as imposing a 20% fine on domestic sales.

Unlike the Antimonopoly Act, this new regulation requires continuous dialogue with stakeholders, such as designated business operators and app operators, to improve business models.

Regulations have been introduced in the EU and the US to prevent market domination by digital platform operators. There are moves to file lawsuits. In line with this trend, Japan is also beginning to build a new legal framework. The bill is targeted for passage in the current Diet session, and is scheduled to go into effect within a year and a half after it is promulgated.