Apple may soon face further pressure to open its tightly controlled ecosystem, as Japan has reportedly passed an antitrust law aimed at curbing the dominance of big technology companies like Apple and Google. According to a report by 9To5Google, which cited Japan’s Kyodo News, Japan’s parliament passed the legislation on June 12, 2024. This new law will require tech giants to allow third-party app developers to distribute their apps on platforms like the App Store and Google Play without being restricted by the companies’ rules.
The move follows similar legislation introduced in the European Union, which forces Apple to allow third-party app stores and alternative payment systems on its devices under the Digital Markets Act (DMA). The new Japanese regulations are designed to enhance competition by giving developers more freedom in how they distribute apps and process payments, which could lead to lower costs and better options for consumers.
Key Provisions of the Law
Under the new Japanese antitrust law, Apple and Google will be prohibited from limiting third-party companies’ ability to sell or operate apps outside their respective app stores. This could mean that developers will soon be able to distribute apps directly to users without going through the Apple App Store or Google Play Store, bypassing the fees and restrictions typically associated with these platforms.
Additionally, the law mandates that developers be allowed to use payment systems of their own choosing, instead of being forced to rely on Apple or Google’s proprietary payment services. Currently, both tech giants charge commissions ranging from 15% to 30% for app store purchases, which has long been a point of contention between app developers and the companies.
Impact on Apple and Google
The regulations in Japan are seen as part of a growing global trend to regulate the market power of tech giants like Apple and Google. Apple, in particular, has faced increasing scrutiny over its app store policies, with critics arguing that the company’s control over app distribution stifles competition and harms consumers by inflating prices.
Earlier this year, under the DMA in the European Union, Apple was forced to make significant changes to its App Store policies. The company allowed third-party app stores, referred to as “App Marketplaces,” and introduced the option for developers to offer alternative payment methods. As a result, developers in the EU can now link to external payment systems, bypassing Apple’s commission fees. These changes represent a significant shift in Apple’s previously rigid ecosystem.
With Japan now passing similar laws, Apple may be required to adopt the same open model in the East Asian market. The new regulations would challenge Apple’s current practices, potentially reducing its control over app distribution and payments on iPhones in Japan, as it did in the EU.
India’s Move Towards Similar Regulations
Japan’s new antitrust laws are not the only threat to Apple’s and Google’s closed ecosystems. India is also reportedly considering a similar approach. A Reuters report indicated that the Indian government is reviewing a panel’s February 2024 report, which recommended the introduction of a “Digital Competition Bill” to strengthen existing antitrust laws.
The proposed legislation in India would impose stringent compliance obligations on major tech companies like Apple, Google, Meta, and Amazon. These regulations would likely prevent tech giants from exploiting non-public user data and from prioritizing their own products or services over third-party options on their platforms.
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Moreover, the Indian bill would prohibit Apple and Google from limiting users’ ability to download, install, or use third-party apps. If passed, this law could compel Apple to open its ecosystem in India in a manner similar to what has happened in the EU and now Japan.
Global Shift Toward Regulating Big Tech
The regulatory moves in Japan, India, and the EU reflect a growing international effort to curb the influence of big tech companies and promote fair competition. As countries introduce these new antitrust laws, Apple and Google could be forced to rethink their business models globally. For Apple, which has long relied on its tight ecosystem for security, privacy, and revenue generation, these developments could represent a major shift in how the company operates worldwide.
As Japan enforces its new law and India potentially follows suit, both Apple and Google will face significant challenges in adapting to these open-market regulations. The ripple effects of these changes could pave the way for a more competitive and consumer-friendly app ecosystem across the globe.
