The “superior bargaining position” that Apple and Google have in mobile operating systems and mobile app distribution is a problem under Japan’s anti-monopoly laws, as they hold a combined market share of over 90 percent, Japan’s antitrust regulator said.
The Japan Fair Trade Commission (JFTC) published a report [pdf] on Thursday recommending a host of changes to the mobile operating system and app stores operated by Google and Apple, citing the lack of “competitive pressure.”
According to the report, both companies are in a monopoly-like position when developing their apps and products compared to their competitors, allowing them to establish their own policies and commission rates.
“Some of the app stores set commission rates lower than 30 percent (around 12 percent). Because there is not enough competitive pressure on app distribution in the app stores provided by Google and Apple, the level of app store commission cannot be expected to decline by market functions,” it stated.
The report states that Apple and Google gain a competitive edge in consumer choice for their apps by disabling the uninstallation of pre-installed apps or complicating the process for changing the default settings.
It called for an “equal footing regarding app store management,” including allowing users to select a third-party payment mechanism rather than requiring them to utilize Google or Apple services.
“It is desirable for Google and Apple, which are in a position to make rules in the mobile ecosystem, to take the measures to develop a fair, competitive environment within their respective ecosystems,” JFTC said.
The report also called for a legal framework in terms of competition policy to ensure fair competition in the country, such as increasing the scope for potential competitors to enter the market.
The report findings came after JFTC launched a probe into Apple and Google in October 2021 for anti-competitive practices. The Epoch Times has reached out to both firms for comment.
‘Harmful to Consumers and Developers’
The U.S. Commerce Department said in a Feb. 2 report that the current app store model—dominated by Apple and Google—is “harmful to consumers and developers” by inflating prices and reducing innovation.
The firms have a stranglehold on the market that squelches competition, it adds.
“The policies that Apple and Google have in place in their own mobile app stores have created unnecessary barriers and costs for app developers, ranging from fees for access to functional restrictions that favor some apps over others,” the report said.
The Commerce Department report said “new legislation and additional antitrust enforcement actions are likely necessary” to boost competition in the app ecosystem.
A Google spokesperson said the firm disagrees with the report, namely “how this report characterizes Android, which enables more choice and competition than any other mobile operating system.”
Apple has defended the area surrounding its iPhone app store, known as a walled garden, as an indispensable feature prized by consumers who want the best protection available for their personal information.
It has said it faces significant competition from various alternatives to video games on its iPhones. And Google has long defended itself against claims of monopoly.
In an op-ed in The Wall Street Journal in January, President Joe Biden called on Democrats and Republicans to rein in large tech firms without mentioning Cupertino, California-based Apple Inc. and Mountain View, California-based Google LLC by name.
“When tech platforms get big enough, many find ways to promote their own products while excluding or disadvantaging competitors—or charge competitors a fortune to sell on their platform,” Biden said.
“My vision for our economy is one in which everyone—small and midsized businesses, mom-and-pop shops, entrepreneurs—can compete on a level playing field with the biggest companies,” he added.
The Associated Press contributed to this report.
