Authorities in Japan’s antitrust agency have launched an investigation into multinational company Google for allegedly pressuring smartphone manufacturers to use its web search engine as the default option. This investigation comes after both European and US authorities have strengthened regulations and imposed hefty fines on Google, which currently controls approximately 90% of the global internet search market.
The Japanese agency is trying to determine whether the practices of the US company are hindering competition in the Japanese market, where Google has a dominant market share of over 70%. “We will investigate the contracts and their influence on the local market,” said a spokesperson for Japan’s Fair Trade Commission during a press conference.
In the past, the Commission has conducted similar investigations against Amazon and Apple. In Amazon’s case, pressures faced by retailers in Japan to favor the company’s e-commerce services, as well as compensatory payments demanded due to discounts applied on its platform and excess inventory, were investigated. The investigation was closed in September 2020 after Amazon agreed to improve its business practices and pay compensation of approximately $18 million.
As for Apple, the Fair Trade Commission also investigated the tech giant’s alleged restrictive practices in the sale of applications or digital content in direct competition with its own. However, the case was closed in September 2021 after a policy review.
Internationally, both Europe and the United States have ramped up sanctions and regulations relating to smartphone software, where big companies have prominent dominance. In 2022, the European Union passed the Digital Markets Act to strengthen regulation of tech companies’ activities and enhance competition. In the United States, similar legislation was approved, banning tech giants from favoring their own products and facilitating communication between competing companies and their opponents’ customers.
Japan, which holds the G7 presidency in 2023, has emphasized the importance of regulating digital environments and new technologies. In this regard, it has convened a meeting of representatives from antitrust authorities to discuss regulation surrounding major tech companies.
Sources: Japan’s Fair Trade Commission.