Japan Imposes App Payment Regulations on Google and Apple

In an effort to promote competition in the app payments market, the Japanese government has announced plans to enforce new regulations on tech giants Google and Apple. These rules will require both companies to allow developers to use alternative payment systems separate from Google and Apple's native platforms.

A government panel report suggests that Google and Apple should enable smartphone users to securely install apps from sources other than the App Store and Google Play Store in order to create a more competitive and diverse app ecosystem in Japan. In addition, the government plans to introduce regulations requiring Apple and Google to simplify the process of removing pre-installed apps from iPhones and Android devices, granting users greater control over their device's software.

This report comes after a thorough examination by the Japan Fair Trade Commission, which revealed a lack of competitive pressure for Apple and Google in Japan's mobile operating system and app distribution service market. These findings have spurred the government to take a more proactive approach to implementing new regulations.

Global Concerns

Concerns about tech monopolies have led to regulatory scrutiny worldwide, resulting in changes to Google and Apple's business practices. For example, Apple faced a €50 million fine from the Dutch Consumers and Markets Authority (ACM) and subsequently enabled alternative payment options for Dutch dating apps. In compliance with the EU's Digital Markets Act, Apple is expected to introduce app sideloading for European users, though this feature was not included in the initial iOS 17 beta release.

Google has also taken steps to address competition concerns, launching its User Choice Billing program in Japan, which allows Android developers to offer alternative payment methods alongside Google's own system. The program, which reduces in-app purchase fees by 4%, was expanded to the United States, South Africa, and Brazil in November. These actions by Google and Apple demonstrate their efforts to accommodate evolving consumer preferences and address competition concerns in various regions.