The Japan Fair Trade Commission (JFTC) has taken a significant step in the realm of digital competition by issuing a cease-and-desist order against Google. This landmark decision marks the first time a major U.S. tech company has faced such action in Japan, highlighting the increasing scrutiny of big tech firms globally.
Details of the Order
According to the JFTC, Google has engaged in practices that violate Japan’s anti-monopoly law by compelling Android smartphone manufacturers to preinstall its applications. Saiko Nakajima, a senior investigator at the commission, noted that Google’s actions have effectively restricted the availability of competing search engine applications on Android devices. The commission’s findings indicate that Google required manufacturers to install essential apps like Google Play and Chrome, positioning them prominently on the home screen for user accessibility.
Furthermore, the commission revealed that Google incentivized manufacturers through financial arrangements tied to advertising revenue, provided they designated Chrome as the default browser and refrained from preinstalling rival search applications. Nakajima emphasized that such conduct poses a risk to fair competition, leading the JFTC to conclude that these practices contravene the Antimonopoly Act.
Impact on the Market
As of December 2024, Google had established agreements with at least six manufacturers responsible for approximately 80% of the Android smartphones in use across Japan. The cease-and-desist order mandates that Google cease these practices immediately, prohibits the company from requiring manufacturers to preinstall its apps, and instructs it to formulate compliance guidelines. Additionally, Google is required to appoint an independent third party to oversee its adherence to these directives and report to the JFTC over the next five years.
In response to the order, Google expressed its disappointment, stating that it intends to collaborate with the JFTC to ensure that Android continues to be a competitive option for consumers. This regulatory action aligns with similar moves against Google in both the United States and Europe, reflecting a growing trend of governmental oversight in the tech industry.
The investigation by Japanese regulators commenced in 2023, following consultations with international authorities addressing comparable issues in the tech landscape. As the digital marketplace evolves, the implications of this order may resonate beyond Japan, influencing how tech giants operate in a global context.
