Japan unleashes regulation Kaiju on Apple's and Google's app store monopolies

Digital Competition Conf wants rift in markets to allow new app-slingers to spawn

Japan has joined the list of nations determined to bust the dominance of Apple and Google over app stores on their respective mobile operating systems.

The nation's government last Friday staged its seventh Digital Market Competition Conference – the big output of which was a Final Report on Competitive Evaluation of Mobile Ecosystems. That report found mobile ecosystems have become critical infrastructure – but that more options for consumers are needed, with equal and equitable competition environment put in place.

The report recommended Apple and Google be required to allow third party payment services to access their app stores, so developers can offer users a choice of how to pay for their digital tat. Japan also wants the two tech giants to stop preferencing their own apps in their digital tat bazaars, and make them easier to remove from devices instead of giving them privileged status.

The reforms are hoped to reduce the price Japanese consumers pay for apps – perhaps by fostering third party app stores that charge lower fees than Apple's 30 percent and the variable rates Google charges. Both giants claim the fees they charge cover the cost of their app stores, plus reasonable profits. But as neither has any real competition, and both post enormous profits, regulators contend there's almost certainly margin to be trimmed.

Japan is not alone in pursuing these reforms. South Korea has already done so, with mixed results, and the EU, USA, India, Australia, and others are keen to do likewise. Epic Games is trying to force the issue, with its lawsuits against Google and Apple.

But Japan has reportedly given Google and Apple a little out: a suggestion that security arrangements need to satisfy the dominant digital duo.

And that's a possible problem for Japanese consumers. Apple, in particular, has protested similar arrangements overseas by arguing any third party access to the iOS App Store and payment processing represents a risk it finds uncomfortable.

Google has been more open to this sort of reform – largely because it’s always allowed third party app stores access to Android and wouldn't have a leg to stand on if it outright opposed more choice.

Legislation to make the report's recommendations a reality is due to reach Japan's parliament in 2024, meaning it could be years before whatever regime is agreed debuts. ®

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