Japan Approves Bill to End Apple's App Store Monopoly, Sparking Intense Lobbying

The Japanese government has approved a bill aimed at ending Apple's monopoly on the iPhone app market by allowing other app marketplaces to compete with Apple's App Store. The bill, which is expected to be debated in the current Diet session ending in late June has triggered intense lobbying efforts by Apple to block its passage.

The legislation seeks to impose regulations on tech giants like Apple and Google to encourage competition in the smartphone software field. It would require these companies to allow other firms to provide app stores and payment systems on their platforms, and prohibit them from giving preferential treatment to their own services in search results. Violators could face fines equivalent to 20% of their domestic sales.

Apple has strongly opposed the provisions that would allow other app stores on its operating system, citing concerns over device security and user privacy. The government has proposed allowing Apple to take necessary measures to ensure safety, but the tech giant remains opposed to the bill.

The legislation is part of a global trend to tighten regulations on tech giants, with similar efforts already implemented in the European Union and the United States government suing tech firms for antitrust violations. Japan's move aims to address the adverse effects caused by the tech giant oligopoly and foster a fair business environment for smaller Japanese software service providers who have been "digital tenant farmers" to global IT firms like Apple.

Why this matters: The passage of this bill could significantly impact the smartphone app market in Japan and potentially set a precedent for other countries looking to regulate the power of tech giants. It could lead to more choices for consumers and create opportunities for smaller app developers to compete on a more level playing field.

The Japan Fair Trade Commission, which would have jurisdiction over the new law, has stressed the need to pass the bill during the current Diet session. The legislation defines four designated software categories, including operating systems, app stores, browsers, and search engines, and would apply to companies with dominant influence in these areas. If enacted, the new law could be fully implemented by December 2025, putting Japan on par with regulatory moves in Europe and the United States to rein in the power of tech giants.

Key Takeaways

• Japan approves bill to end Apple's iPhone app store monopoly.
• Bill requires tech giants to allow other app stores and payment systems.
• Violators face fines up to 20% of domestic sales.
• Bill aims to foster competition and opportunities for smaller developers.
• Law could be fully implemented by December 2025, aligning with EU and US.