Yen for Competition: Can Japan’s App Store Rules Shake Up Apple & Google?

In recent years, Apple and Google have faced intensifying antitrust scrutiny, particularly in the European Union. For instance, Apple was subjected to four public antitrust investigations in the past few years, three of which targeted the Apple App Store, initiated by allegations from Spotify in 2019. After two years of investigation, the European Commission’s preliminary findings indicated that Apple had breached EU competition laws.

According to media reports, Japan is considering implementing regulations similar to those of the EU to combat monopolistic practices in the Apple App Store and Google Play Store. These regulations aim to curb the dominant market positions of Apple and Google by requiring them to allow external app stores and payment systems on their mobile operating systems. It is understood that this new legislation is slated to be proposed to the Japanese Diet in 2024.

Apple iOS sideloading

Under the proposed regulations, restrictions would be placed on Apple and Google from keeping users within their ecosystems and excluding competitors. The main areas of focus include app stores, payment systems, search engines, browsers, and operating systems. The Japanese government may permit Japanese companies to integrate their app stores into iOS and Android platforms and to use third-party payment methods. Furthermore, the Japan Fair Trade Commission would have the authority to impose fines on Apple and Google for non-compliance.

It remains uncertain whether the new legislation will be passed, and there is scant detail about how Apple and Google might respond. According to statistics, Japan’s mobile app market size reached $29.2 billion in 2023, doubling in size since 2018.