Japan Warns Apple & Google App Stores

Apple and Google may be violating Japanese antitrust law with their handling of mobile apps, the Japan Fair Trade Commission said Thursday, arguing for further regulation to prevent anti-competitive behavior by tech platforms.

A report released by the antitrust watchdog found that the two tech giants hold a duopoly in mobile operating systems here, with the market share of Apple’s iOS at 46.6% and Google’s Android at 53.4%. They also dominate the app store market, where the FTC said there is “not enough competitive pressure.”

The report called for Apple and Google to let users select third-party payment methods instead of forcing users to go through their own services, addressing an issue frequently cited by antitrust regulators elsewhere.

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It also pointed to their app store commission rates of 15% to 30%, a source of frustration for developers. Unilaterally setting excessive fees could constitute abuse of a dominant bargaining position under Japanese antitrust law, the FTC said.

In written answers to questions from the regulator, Apple said it considered a commission-based model to be the best way to encourage app development. Google asserted that most developers that pay the fees are charged rates of 15% or less.

The FTC argued that Google and Apple could favor their own apps over competitors by manipulating search rankings, for example, and said such practices would have antitrust implications. It urged them to ensure a level playing field.