Japan Readying Legislation to Boost Competition Among App Stores

Japan is looking to boost competition among app stores and payments.

A government panel released a report Friday (June 16) saying that app store operators should not be able to force software developers to use a particular payment system, and that suppliers of operating systems (OS) for smartphones should not make their own app stores the only secure way to obtain apps, Reuters reported Saturday (June 17).

The government panel’s report said it will now look into developing the legislation that would be required to implement these practices, according to the report.

The recommendations aim to boost competition in the Japanese market in which Apple’s iOS and Alphabet’s Android OS each account for half the mobile market, the report said.

Both tech giants require software developers to use proprietary payment methods — and collect commissions as high as 30% — and Apple also makes its own app store the only way to download iPhone apps.

It was reported in December 2022 that Apple CEO Tim Cook met with Japanese Prime Minister Fumio Kishida during that month to discuss Cook’s concerns of the country’s potential regulation of app stores.

Cook and Kishida discussed the ramifications such regulation would have on Apple users and Apple’s commitment to Japan, which includes the company’s $100 billion investment in the country’s supply chain over the previous five years, Nikkei reported Dec. 31.

Apple has faced challenges around its app store and practices in other countries as well.

In April, a United States appeals court upheld an earlier ruling in a case that said Apple can no longer prohibit developers from offering links enabling payments outside the company’s app store.

The appeals court sided with Apple on nine other matters, however, including agreeing with an earlier ruling that Apple hasn’t violated antitrust laws, Reuters reported April 24.

In January, Google told the Indian Supreme Court that an antitrust order will slow the growth of the Android ecosystem in the country by requiring Google to modify its contracts.

“Tremendous advancement in growth of an ecosystem of device manufacturers, app developers and users is at the verge of coming to a halt because of the remedial directions,” Google said in a court filing, Reuters reported Jan. 10.