Japan's Fair Trade Commission (JFTC) is intensifying its scrutiny of Google's business practices, marking a significant step in regulating major tech companies. On April 15, 2025, the JFTC issued a cease and desist order against Google LLC, the first such action against a major U.S.-based tech firm, for allegedly violating the country's Antimonopoly Act. The JFTC contends that Google has been employing anti-competitive practices related to its dominance in the smartphone market.
The core of the JFTC's concern revolves around Google's "Mobile Application Distribution Agreements" (MADAs) with Android handset manufacturers. These agreements reportedly require manufacturers to pre-install Google's Chrome browser, a Google search bar, links to specific Google apps, and the Google Play store. In addition, the JFTC is scrutinizing revenue-sharing deals Google has with some manufacturers, where a portion of search advertising revenue is shared, contingent on the manufacturers not installing competing search services. The JFTC argues that these conditions and revenue-sharing arrangements violate Japan's Antimonopoly Act because they restrict competition and create barriers for new entrants.
Specifically, the JFTC investigation revealed that Google, since at least July 2020, has been preventing the implementation of search functions from other general search service providers on Android smartphones. The regulator found that Google's contracts covered approximately 80% of Android smartphones sold in Japan as of December 2023. Six smartphone manufacturers had Mobile Application Distribution Agreements (MADA) with Google, while four manufacturers and one mobile carrier had Revenue Sharing Agreements (RSA).
Under the terms of MADAs, manufacturers who wanted to pre-install the Google Play app store were also required to pre-install the Google Search app, placing its widget and icon on the initial home screen, and pre-install the Google Chrome browser, placing its icon on the initial home screen and maintaining Google as the default search engine.
In response to the order, Google stated that they are disappointed by the JFTC's findings, arguing that its agreements with Japanese partners are pro-competitive and have boosted their ability to invest in product innovations. Google has said they will review the order to determine their next steps.
The JFTC's investigation into Google's Android deals began in October 2023. In April 2024, the JFTC approved a commitment plan from Google that addressed some of its anti-competitive concerns. However, the JFTC decided that stronger action against the company was necessary, since most of the facts of the violation had already been identified.
To ensure compliance, Google has been asked to appoint an independent third party to report to the JFTC on its compliance with the cease and desist order over the next five years. The JFTC also intends to continue checking whether Google is complying with the order.
This action by the JFTC aligns with a global trend of increasing scrutiny of tech giants and their market power. In 2018, the European Union fined Google a record €4.34 billion for abusing the dominance of Android. In August 2024, a U.S. district court ruled that Google had violated the law.
The JFTC's order could reshape how Google operates in Japan. It also signals a broader shift in Asian tech regulation. Japan is backing this regulatory shift with significant resources, requesting a 43% budget increase to 17.4 billion yen (US$120 million) for fiscal year 2025 and establishing a new section with approximately 50 officials dedicated to tech regulation. 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.
