There’s no denying that digital marketplaces have become an essential part of our contemporary daily lives. And as they continue to take hold, governments around the world have been stepping up their efforts to regulate tech giants.
In June 2024, Japan took a bold step with the introduction of the Act on Promotion of Competition for Specified Smartphone Software (for short, the Smartphone Software Competition Promotion Act or SSCPA), which will become effective by December 2025. And this new law is Japan's answer to the global apprehensions over big tech's hegemony in the digital market, with a specific focus on smartphone software ecosystem.
What’s in Japan’s Smartphone Software Competition Promotion Act ?
The SSCPA seeks to transform the competitive landscape for both businesses and consumers alike by ensuring greater transparency in app stores, limiting preferential treatment of specific apps, and enhancing consumer protections. It reflects a major advancement for Japan, given its conventional approach to digital market regulation, largely driven by the Antimonopoly Act. An approach that was described as responsive, accommodating, and open to negotiation with big tech companies. However, the SSCPA establishes regulatory framework, which may indicate a shift in how Japan enforces competition law in the digital realm.
But, how does it compare to the EU and the UK?
Since its adoption, the new Act has been compared to similar legislation such as the EU's Digital Markets Act (DMA) and the UK's 2024 Digital Markets, Competition, and Consumer Act (DMCC Act). While the three laws share common objectives - such as promoting competition, reducing monopolistic behavior and strengthening consumer rights- , these three pieces of legislation differ in several respects as well.
The DMA takes a broader approach, focusing on “gatekeeper” companies tech giants that control the main online platforms. The DMA imposes stricter rules on these platforms to ensure fair competition and prevent the exploitation of small businesses. Meanwhile, the UK’s DMCCA, which came into force in 2024, establishes a dedicated Digital Markets Unit (DMU) to oversee enforcement, giving it more teeth to tackle anti-competitive behavior across a wide range of digital markets.
Japan's SSCPA is much more limited in scope, but it too could have significant impact on companies like Apple and Google which dominate the smartphone market.
As Japan navigates this new regulatory landscape, many questions arise: Will the SSCPA effectively foster competition and protect consumers? How will it compare to the stricter regulatory environments in the EU and UK? And most importantly, what changes will it bring for Big Tech companies operating in Japan?
The global regulatory landscape remains complex and understanding the differences between Japan, the EU and the UK is crucial for anyone operating in or affected by the digital economy.
In the eBook I am releasing shortly, I will explore these questions further, explaining in-depth details related to the SSCPA and what it all means. In comparison with the EU and UK regulations, I examine Japan's new law as well to decipher these implications for consumers, businesses, and global digital market regulation in the future.
Full breakdown and insights coming up!