Japan FTC Accuses Apple, Google of Anti-competitive Behavior in Mobile App Market, Calls for Regulation

A recent report from the Japan Fair Trade Commission (FTC) suggests that the way Apple and Google handle mobile apps may be against Japanese antitrust laws.

Based on a report from Nikkei Asia, Apple's iOS and Google's Android are the two tech juggernauts that hold 46.6% of the market share for mobile operating systems in Japan, creating a duopoly between the two tech firms. They also have a dominant position in the market for app stores, where the FTC says there is not enough competition.

Japan's FTC Report

The FTC reportedly demanded that Apple and Google permit users to choose third-party payment methods rather than requiring them to use their proprietary services.

The 15% to 30% app store commission rates were also mentioned in the report, which may be considered an abuse of a dominant bargaining position under Japanese antitrust law.

In written responses to the FTC, Google claimed that most developers were paid rates of 15% or less, in contrast to Apple's assertion that it thought a commission-based model was the best way to promote app development.

The FTC argued that both businesses could rig search results to favor their own apps over rivals, and urged them to maintain a level playing field. Both businesses denied taking any such actions.

The FTC report said that the current antitrust law is not enough to deal with the fast-changing digital sector, and it called for new laws to stop anti-competitive behavior.

It is important to note that the App Store's market share on iOS devices is 100%, while Google Play's market share on Android devices is estimated to be in the high 90% range.

Looking into Possible Market Violations

The government's council on digital competition is talking about preventive regulation, and the FTC plans to work closely with the government and take part in future discussions about making rules.

The Digital Markets Act, which is set to go into effect in 2023, shows that the European Union is taking a cautious approach to regulation.

The law says that tech giants can't use their platforms to hurt competitors or force users to only use their own payment services.

The current market share of mobile operating systems shows that Android has a 53.4% share, while iOS has a 46.6% share. Under the Antimonopoly Act (AMA), the Japanese Fair Trade Commission (JFTC) continues to deal with specific cases involving mobile operating system (OS) providers or app store operators.

Other countries' regulators forced Apple and Google to change their business practices. After South Korea passed a law in 2021 that said app store owners could ntt force developers to use their billing systems, both companies started accepting other ways to pay.

Google has also lowered the commission rates in its app store and started accepting third-party payment methods for apps that aren't games in some countries, such as Japan.

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