Japan FTC to Regulate Google, Apple under New Smartphone Law

Japan's Fair Trade Commission said Monday that it has designated three companies including Google LLC and Apple Inc. as subject to rules under a new law regulating major information technology companies in the smartphone application market.

The law will prohibit IT giants from blocking the entry of other companies into the market or giving preferential treatment to their own services.

It is aimed at encouraging competition in the market and reducing oligopoly.

Along with the two US giants, iTunes K.K., an Apple subsidiary in Tokyo, was also designated by the watchdog.

The law regulates four areas--app stores, operating systems, browsers and search engines.

Google will be subject to restrictions under the law in all four areas, while Apple will face restrictions in three areas, excluding search engines.

For iTunes, restrictions will apply to the app store it operates with Apple. After full enforcement is scheduled for December, violators will face fines of 20 % of their Japanese sales in the areas where violations take place.

For repeat offenses, the fines will be increased to 30 %.

The three companies will report annually on their compliance with the law. In December last year, the FTC established criteria for applying the new law to companies with an average monthly user base of 40 million or more.

It received reports from the possible target companies and conducted examinations.

Japan FTC to Regulate Google, Apple under New Smartphone Law