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Making the Digital Market Easier to Use: The Act on Improving Transparency and Fairness of Digital Platforms (TFDPA)

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For small-to-medium-sized enterprises, start-ups and freelancers, digital platforms such as online shopping malls and App Stores offer tremendous benefits. They can make it easier for them to access markets and attract new customers. However, some users of these digital platforms in Japan have expressed concerns such as; "The rules for things like the fees for opening stores are changed unilaterally," and; "The digital platform provider and its affiliates' products are given priority by being listed first.”

Prevent Violations of the Antimonopoly Act

If a digital platform provider abuses its dominant position and acts in a way that hinders fair competition, corrective action will be taken under the Antimonopoly Act. The Act on Improving Transparency and Fairness of Digital Platforms (TFDPA), came into effect in April. This new legislation requires designated digital platform providers to work to ensure transparency and fairness in the digital market, which is expected to prevent them from violating the Antimonopoly Act.

Five Digital Platform Providers Subject to New Regulations

In April 2021, the Ministry of Economy, Trade and Industry (METI) designated five providers of online shopping malls and application stores as subject to the regulations under TFDPA. These providers will now be required to give advance notification of any changes to their terms and conditions, disclose the scope of use of the data obtained from digital platform users, develop systems to ensure fair transactions, and submit a report to METI every fiscal year with an overview of the measures they have taken, along with self-assessments.

METI will review the report, taking into account the opinions of a wide range of stakeholders, and will publish the results of its assessment of the transparency and fairness of these digital platforms. Based on the results of the assessment, digital platform providers will be expected to take steps to voluntarily improve the transparency and fairness of their digital platforms. In addition, if METI finds a suspected violation of the Antimonopoly Act, it will request the Japan Fair Trade Commission to take action in line with the Antimonopoly Act. Through this cycle of initiatives, METI aims to promote the development of the digital market in Japan.

Where to Go for Help? Digital Platform Consultation Desk

METI has established digital platform consultation desks that will offer free consultations for business issues and provide information and financial assistance for those seeking legal counsel. METI encourages business users of digital platforms to make use of the consultation desk for any business issues related to digital platform use.

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Last updated:2021-04-23