TOKYO (ANN/THE YOMIURI SHIMBUN) – At a joint meeting of its Economy, Trade, and Industry Division and other divisions on Tuesday, the Liberal Democratic Party greenlit a bill aimed at regulating tech giants.
Under the proposed legislation, the Japan Fair Trade Commission would wield the power to impose a “surcharge” equivalent to 20 per cent of domestic sales in relevant sectors should companies like Apple Inc and Google LLC fail to adhere to specified mandates, such as granting access to smartphone app stores to other firms.
The government targets Cabinet approval of the bill as soon as this month, with aspirations to secure passage during the current Diet session.
Under the current Anti Monopoly Law, the basic surcharge level for cartels is 10 per cent, and it is only six per cent for acts of “exclusion-type private monopolisation,” which corresponds to violation of the regulation to be stipulated in the envisaged law.
The surcharge under the envisaged law is much higher than these levels, and it will be raised to a maximum of 30 per cent if violations are repeated.
According to the JFTC, the total sales by app distributors and other companies through Apple’s App Store amounted to approximately JPY1.6 trillion in the Japanese market in 2021.
Assuming that Apple took a 30 per cent commission from the sales, Apple’s revenue subject to the surcharge is approximately JPY480 billion.
Based on a simple calculation, if Apple violates the envisaged law, the surcharge for one year amounts to approximately JPY100 billion.
