【METI Mobile】Competition and Monopoly in Japan’s Digital Market
Smartphone OSs in Japan
Top smartphone OS providers Apple and Google each have firm holds on the Japanese market. Japan’s Ministry of Economy, Trade and Industry (METI) is currently investigating the full impact of these digital market monopolies.
What are digital marketing platforms?
Digital marketing platforms are businesses providing digital platforms for other businesses to sell or advertise products. In the current market, Google, Apple, Facebook and Amazon are the major digital market platforms, collectively referred to as “GAFA.”
Convenience and concerns
While the services provided by these platforms are extremely convenient for consumers, small businesses are raising concerns about the unfair business advantage of monopolies on the digital marketplace.
App developers must pay to play
One example is the sales model for smartphone apps. App developers are required to sell their work through platforms on terms set by the platforms, including a 30% sales commission, and predetermined price settings. Though this business model may help streamline the publishing process, the power imbalance between platforms and app developers creates risks, such as the possibility of unilateral contract changes that may have serious consequences for developers.
Grounds for antitrust action?
METI has compiled a report on the issue of business competition in digital marketplaces. The survey targeted a variety of businesses in the market. However, confidentiality agreements between developers and platforms became an obstacle to collecting all the necessary information. To determine a more comprehensive picture, it may be necessary to call for an investigation under Japan’s Antimonopoly Act.