Japan joins ranks of nations plotting smackdown for Apple, Google

Regulator wants to bust the oligopoly in mobile OS and app markets

Japan's competition regulator has recommended big changes to local laws to reform the "oligopoly" it's assessed Google and Apple enjoy in the markets for mobile operating systems and the apps that run on them.

The nation's Fair Trade Commission yesterday published a Market Study Report on Mobile OS and Mobile App Distribution. It found that, while SymbianOS still has a measurable presence in Japan, Apple and Google utterly dominate the markets for smartphones, mobile OSes, app stores, and even smartwatches.

The regulator proposes to fix that with four sets of actions.

The first set it's described as "Prevention of self-preferencing in the app market and other smartphone related markets". It envisages measures such as ensuring that third party developers enjoy the same level of access to OS functions as Apple's and Google's own coders – and the same advance warning of OS updates.

Access to third party payment services to purchase apps and for in-app purchases is also suggested.

A second suggested set of reforms – described as "Ensuring a healthy competitive environment in the mobile OS market and the app distribution service market" – calls for improved portability of user data between operating systems.

One passage in that section will likely be welcomed by Apple, because it calls for allowing use of third party app stores "If there is no problem in terms of security assurance and privacy protection". Apple has argued strongly that third party app stores could represent a security risk – which is a bit rich given that its own supposedly excellent vetting of apps has failed to detect malware.

A third recommendation – "Ensuring fairness in rule-making for the mobile ecosystem" – calls for Apple and Google to give developers more detail, and more notice, when they change rules.

The fourth and final recommendation is titled "Promotion of competition related to the formation of new ecosystems". It offers only the following description:

Continuing to bring about innovation without hindering the creation of new products or services and the construction of new ecosystems centered on such products or services by developers other than Google and Apple

Japan is far from alone in seeking this sort of action. South Korea took the lead by passing laws requiring third party payment system access to app stores. Australia has inquired into app stores and whether they warp markets. India has fined Google for running a monopoly with Android and the Play store. And just last week the US Commerce Department labelled the iOS and Android app store model "harmful to consumers and developers".

The European Union has also acted to diversify the apps market.

Japan's action means that at least eight of the world’s largest economies have regulated – or signalled an intention to regulate – app stores.

Change is clearly coming, and Google has largely acquiesced to calls for it to allow third party payments.

It's easier for Google to do that than it is for Apple, because third party app stores have long been permitted on Android. Apple has been less willing to open its ecosystem to others, which is why Epic Games forced the issue in court.

Japan's report is just that – a report – and offers no timeframe for action. But modernizing markets is a government priority in Japan, so action is likely. ®

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