The Japan Fair Trade Commission (JFTC) has taken a significant step in regulating the digital market by issuing a cease and desist order to Google LLC, accusing the tech giant of anti-monopoly practices related to its Android smartphone distribution agreements. This marks the first time Japan has taken such an action against a major U.S. tech company, highlighting a global trend of increasing scrutiny of tech giants and their potential anti-competitive behaviors. The JFTC's investigation, which began in October 2023, focused on Google's Mobile Application Distribution Agreements (MADAs) with Japanese smartphone manufacturers.
The JFTC found that Google required manufacturers to pre-install Google's Chrome browser, a Google search bar, links to certain Google apps, and the Google Play Store on Android devices. In return for including Google Play, Google allegedly pressured these manufacturers to make Google the default search engine and give preferential placement to Google apps. According to the Fair Trade Commission's investigation, as of the end of December 2024, Google had signed contracts with six companies, and the number of Android smartphones covered by the agreement accounted for more than 80% of the domestic market share. The JFTC also scrutinized Google's revenue-sharing deals with some handset-makers, where Google shared revenue derived from search advertising.
The JFTC concluded that these practices violated Japan's Antimonopoly Act by restricting competition and making it difficult for new market entrants to gain a foothold. The commission's order mandates that Google cease requiring pre-installs of its apps and search service, allow the installation of rivals' offerings, and permit users to choose their default search service. Google has been instructed to involve lawyers and third parties to monitor reforms to its practices, with reports on its compliance with the order to be delivered periodically for five years.
Google Japan has expressed disappointment with the JFTC's findings, stating that its agreements with Japanese partners are "pro-competitive" and have "boosted their ability to invest in product innovations." The company has stated it will review the order to determine its next steps.
This action by the JFTC follows similar investigations and concerns raised in the United States and Europe regarding Google's dominance and potential monopolistic practices. A judge in the U.S. ruled last year that Google's search engine illegally exploited its dominance to squash competition, while the European Commission has also taken steps to address Google's anti-competitive behavior.
Japan has been strengthening its regulatory framework to address digital market issues. Amendments to the Anti-Monopoly Act in 2019 expanded the JFTC's powers. The upcoming Mobile Software Competition Act, set for full enforcement by December 2025, further demonstrates Japan's commitment to creating specialized regulations for digital markets.
The JFTC's action against Google signals a broader shift in Asian tech regulation and reflects a growing global consensus among regulators about the need to address competitive imbalances in mobile software markets.
