Japan Issues Guidelines for Major Tech Companies Regarding Mobile Application Development
In a move to level the playing field in the smartphone app market, Japan has enacted a new law targeting tech giants like Google LLC and Apple Inc. The Mobile Software Competition Act (MSCA), effective from December 2025, aims to reduce the over 90% market dominance held by Google's Android and Apple's iOS in Japan's smartphone OS market.
The MSCA mandates several measures to promote competition, primarily focusing on the following aspects:
- App Store Exclusivity: Third-party app stores will no longer be excluded from operating system platforms, ensuring fair competition.
- Data Usage: The use of data obtained through operating systems to develop competing products is prohibited, preventing tech giants from gaining unfair competitive advantages.
- Access to OS Functions: Third-party developers will now have easier access to core operating system functions, such as voice calls and biometric identification features, previously restricted.
- Alternative Payment Systems: Developers will be allowed to use alternative payment platforms within apps, instead of being confined to Google's and Apple's payment platforms.
- External Links in Apps: Developers will be permitted to include links directing users to websites outside the app software.
- Search Engine Choice: Consumers will be obliged to choose from multiple search engines when purchasing new devices, fostering diversity rather than defaulting to a single search provider.
The Japan Fair Trade Commission (JFTC) has released guidelines to support this law, with a public comment period ending on June 13. However, it remains unclear whether these measures will lead to increased competition in the app market or impact the market share of app stores other than those owned by Apple and Google.
Apple has expressed concerns that these measures could compromise user privacy and security by forcing the company to share technologies and data without compensation, posing risks to protected information. Similarly, there are concerns about having to share confidential technology with third parties.
The MSCA is a significant step towards dismantling the existing monopolistic control of Google and Apple over Japan's app ecosystem and promoting a fairer, more competitive digital market. The law applies to smartphones using Apple and Google's operating systems, but it is unclear whether it will extend to smartphones outside of Japan.
- The Japan Fair Trade Commission (JFTC) encourages third-party app stores to share their platforms on both Google's Android and Apple's iOS, as the new law promotes fair competition.
- The Mobile Software Competition Act (MSCA) also enables developers to share their photos and other data outside of Google's and Apple's walled gardens by allowing external links in apps.
- In Finances, the MSCA mandates tech giants to share access to critical operating system functions, such as voice calls and biometric identification features, promoting competition within Japan's mobile financial industry.
