Japan to introduce tighter rules for tech giants to protect customers

The Japan Fair Trade Commission said the guidelines are designed to address criticism against major tech companies, like Apple, for obtaining personal data by making use of their "superior bargaining position".
The Japan Fair Trade Commission said the guidelines are designed to address criticism against major tech companies, like Apple, for obtaining personal data by making use of their "superior bargaining position".PHOTO: REUTERS

TOKYO (KYODO) - Japan's antitrust watchdog said on Thursday (Aug 29) it has compiled draft guidelines for tighter regulations of technology giants to strengthen customers' data protection, as it aims to introduce the first such rules as early as October.

The Japan Fair Trade Commission said the guidelines are designed to address criticism against major tech companies such as Amazon.com Inc, Apple Inc, Facebook Inc and Google LLC for obtaining personal data by making use of their "superior bargaining position".

These companies are facing growing criticism that they are discouraging new companies from entering the market by monopolising customer data through their platforms to bolster their competitive positions.

The new guidelines will be applied to companies providing services of online shopping, social media, search engines and video, music and apps distribution, the commission said.

The regulators will apply the anti-monopoly law for the first time to business practice between a company and customers to protect consumers' privacy.

The commission stipulates those tech giants are in "a superior bargaining position" when customers have no choice but to provide their data to use services.

Obtaining personal data such as location and purchase records without giving full notification of the purpose of use to consumers will be regarded as an abuse of a superior bargaining position.

Using such information without proper data management will also be deemed as an unfair trade practice, the watchdog said.

The guidelines, to be finalised after soliciting public comments through Sept 30, were drawn up after the ruling Liberal Democratic Party called on the government to impose tighter rules on tech giants to improve their privacy policy and to clarify the rules of transactions with smaller vendors.

 
 

The government aims to enact a new law next year to ensure transparency in business transactions with major tech companies.

Other countries including the United States are also stepping up scrutiny over tech giants to assess whether they are engaging in practices that could undermine fair competition, stifle innovation or harm consumers.