Japan's Fair Trade Commission to take action against Google over monopoly, citing contracts with smartphone makers that require the company to pay a portion of advertising revenue on the condition that the company not install search apps made by other companies
It has become clear that the Japan Fair Trade Commission has decided to issue an exclusion order to Google for violating
US Google to be ordered to remove search app from smartphones - Antimonopoly Act violation - Japan Fair Trade Commission: Jiji.com
https://www.jiji.com/jc/article?k=2024122200278
Google to Fight Japan's Claims That It Hobbles Rivals in Search - Bloomberg
https://www.bloomberg.com/news/articles/2024-12-23/google-to-fight-japan-s-claims-that-it-hobbles-rivals-in-search
According to Jiji Press, Google had signed contracts with smartphone manufacturers under which they were allowed to include their own app stores, in exchange for displaying Google's search app and Chrome on the home screen. Google also agreed to pay smartphone manufacturers a share of the revenue from Google's search advertising service, on the condition that they do not include search apps from Google's competitors.
The Fair Trade Commission has determined that these contracts violate the Antimonopoly Act and has decided to issue an exclusion order to Google. A proposal for disciplinary action has already been sent to Google, and a final decision will be made after hearing Google's opinion.
Google responded to Bloomberg by saying, 'We have been working closely with the Japanese government to demonstrate how we are expanding user choice in the Android ecosystem.' Google also said, 'We will present our case at the hearing,' and 'We are disappointed that the Fair Trade Commission did not fully consider our solution,' suggesting that it has presented some kind of solution to the Fair Trade Commission.
In Japan, the Act on Promotion of Competition Related to Specific Software Used in Smartphones was enacted in June 2024, which restricts 'businesses of a certain size or larger' from engaging in activities such as 'restricting competition between app stores ' and 'prohibiting the use of browser engines other than those designated by designated businesses.' The Fair Trade Commission is holding a ' Study Group on Promotion of Competition Related to Specific Software Used in Smartphones ' in preparation for the enforcement of the law. Google attended the third study group, held on November 28, 2024, and claimed that 'we support third-party app stores and already comply with many of our obligations under the law' (PDF link) .
Google also argues that 'Japan's mobile ecosystem has its own market characteristics' and that 'there is fierce competition in the mobile operating system and search fields,' in order to assert that it is not violating antitrust laws.
Incidentally, the Japan Fair Trade Commission has also allegedly suspected that Amazon Japan LLC's actions, such as 'asking sellers to sell at what it calls 'competitive prices'' and 'asking sellers to use Amazon's delivery service ' Fulfillment by Amazon ,'' may be in violation of the Antimonopoly Act, and is seeking information and opinions from sellers.
Request for information and opinions from sellers regarding suspected violations of the Antimonopoly Act by Amazon Japan, LLC | Fair Trade Commission
https://www.jftc.go.jp/soudan/jyohoteikyo/1204.html
In addition, the editorial department of GIGAZINE has already inquired with the Fair Trade Commission about the exclusion order against Google. We will add an update as soon as we receive a response.
・Added on December 24, 2024 at 13:22:
When we asked the Fair Trade Commission about the schedule for an official announcement on this matter, we received the following response: 'At this time, the Fair Trade Commission is not at the stage where it can make an official announcement.' 'We announced the start of the review of Google in October 2023. At that time, we sent a draft of the exclusion order to Google as a prior notice. In the future, we will go through a process of hearing opinions from Google, and if we ultimately determine that there is a problem, we will issue an exclusion order.' The press announcement regarding the start of the review in October 2023 can be found at the following link.
(October 23, 2023) Launch of investigation into suspected violations of the Antimonopoly Act by Google LLC and others and solicitation of information and opinions from third parties | Japan Fair Trade Commission
https://www.jftc.go.jp/houdou/pressrelease/2023/oct/231023ikenboshu.html
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