Japan Launches New Antitrust Probe Against Apple And Google For Potential Market Manipulation

The Japanese Fair Trade Commission (JFTC) is launching a new antitrust probe against American tech behemoths Apple and Google-parent company Alphabet's activities in the technology sector.

To determine whether Apple and Google have created anti-competitive market circumstances in the smartphone, smartwatch and other wearable sectors, the Japanese regulators will undertake interviews and surveys with OS operators, app developers, as well as smartphone users, said commission Secretary-General Shuichi Sugahisa.

According to a report by Nikkei, during the investigation, the JFTC is expected to collaborate with the government-run Digital Market Competition Council.

The new probe follows the JFTC's conclusion of an examination into Apple's in-app purchase system just over a month ago. During that investigation, the Japanese competition watchdog concluded that Apple was acting anti-competitively by compelling developers to pay Apple's commission on in-app purchases and that it should be allowed to direct customers to other payment alternatives, such as their own websites.

To put an end to the investigation, Apple reached an agreement with the JFTC that allows "reader" app developers to link to external websites for account creation and management.

According to Apple, the upgrade will go live sometime in 2022. Reader apps, such as Spotify and Netflix, offer previously-acquired content or content subscriptions for digital publications, newspapers, books, audio, music and video.

In February 2021, the Japanese government passed the Act on Improving Transparency and Fairness of Digital Platforms. If officials decide that the law applies to the OS market, OS operators will be required to submit transaction reports to the Ministry of Economy, Trade, and Industry on a regular basis.

In Japan, Apple's iOS has a nearly 70 per cent share of the smartphone operating system market, while Android has a 30 per cent share.

If app developers wish to appear on smartphones, they must adapt their applications to operating system standards, whether they specialise in music, streaming movies, e-books, or mobile games.

Google has been accused of requiring device manufacturers to incorporate its search software as a requirement for installing Android. Other search apps are not available to users of these smartphones.

The JFTC will look into whether Apple and Alphabet—Google’s parent company—are abusing their market dominance to monopolise apps and put customers at a disadvantage.

However, the tech giants have been facing a tough time recently as regulators all across the world are concerned about Apple and Google's market domination.

In Australia, the government is investigating the two corporations in a variety of areas, including ad tech, browsers and mobile operating systems, while in the United States, several states have filed a lawsuit against Google for alleged anti-competitive behaviour in the app store business.

According to an investigation that concluded in October 2020 in the United States, Amazon, Facebook, Apple, and Google all have an "alarming" trend of utilising innovation-stifling policies. In response to these results, the government introduced a bill in Congress in August this year that aims to stop "big tech bullying" in the app store space.

As reported recently by The Wall Street Journal, Google has filed an appeal against the European Union's $5 billion antitrust penalties, a judgement passed in 2018.

EU officials accuse Google of abusing its market dominance, but Google maintains that Apple is the true monopoly threat.

Additionally, in late August this year, the South Korean parliament has passed a bill prohibiting large app store operators—Google and Apple—from mandating developers to use their payment systems exclusively for the sale of digital goods and services.