Japan Passes Law To Allow Third Party App Stores, Payments

Japan seems to be following the European Union, with legislation to force the likes of Apple and Google to open up their respective smartphone ecosystems.

The Verge reported that the Japanese parliament has passed a law dubbed the ‘Act on Promotion of Competition for Specified Smartphone Software‘, which will force Apple and Google to allow third-party app stores and payments.

The Verge noted the Japanese law, which is expected to come into force at the end of 2025, bears similarities to the UK’s Digital Markets, Competition and Consumers Bill, as well as the European Union’s Digital Markets Act (DMA).

Designated Providers

The EU’s DMA has designated a number of big name tech firms as ‘gatekeepers’ of online services (i.e. if they provide an important gateway between businesses and consumers in relation to core platform services”.

The EU last year named Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft as DMA gatekeepers, with a total of 22 core platform services from them firms also being designated.

Now Japan’s parliament has passed a law that will require Apple and Google to allow access to third-party app stores and payment providers on devices running their mobile operating systems.

Japan’s ‘Act On Promotion of Competition for Specified Smartphone Software’ law instead uses the term “designated providers”, against whom it will enforce strict rules, in order to reduce app prices and create a more equitable market by allowing more more competition from smaller challengers.

App Stores, Payments

The Verge noted that Apple and Google have already been named as “designated providers”, and Japan’s Fair Trade Commission (FTC) has still to identify other entities to add to its list.

The Japanese law requires “designated providers” to allow third-party app stores, allowing app developers to offer third-party billing services, and make it easier for users to change their default settings and web browsers.

“Designated Providers” that violate the rules face being fined up to 20 percent of the domestic revenue specific to the infringing service, which increases to 30 percent for repeat offences.

No prioritising

The Verge also noted that the Japanese law also prevents tech giants from prioritising their own services in search results.

Google Search (as well as Ad tech) is already at the centre of major antitrust actions in the United States and elsewhere.

Last month the Google clashed with US Justice Department in closing arguments as government argues Google used illegal tactics to maintain search monopoly.