19/04/2025
My LinkedIn has already started being flooded with posts and comments about the Google Ad decision by Judge Brinkema 🇺🇸 (https://www.facebook.com/competlaw/posts/pfbid04mK5FBf8frrTCtrwVczVEZLifTSKk9k7hzK8uAaNQieMaT7rc2S75QUToRGpLPKAl). So, I feel it's a bit late to share, though, I believe, in light of a global perspective, it's still worth sharing: Japan's Google case.
🇯🇵 On April 15, the 公正取引委員会 (JFTC) announced its infringement decision against Google, finding that it violated Japan's competition law (AMA) by engaging in two contractual practices:
(i) MADA: implementing Play Store licensing policy, under which it required pre-installation of (and giving favorable positions for) Google Search and Chrome on mobile, to Android smartphone manufacturers, and
(ii) RSA: revenue sharing policy, under which it required several conditions favoring its search and browser services on Android smartphones with the Play Store licensed, to their makers and distributors (mobile carriers).
Putting aside the facts and Google's “evilness,” I would like to focus more on the legal aspects, which raise a question worth pondering: Why does Japan need the Smartphone Act (SSCPA)?
In Japan's case, Google's conduct was addressed under the unfair trading practices regime (Art 19, AMA), not under monopolization (Art 3). More specifically, among the various types of UTPs, Google's conduct was framed as imposing restrictive conditions, as stipulated and prohibited under para 12 of the JFTC’s General Designation (clarified pursuant to Article 2(9)(vi)(d), AMA).
* For the content of GD in English, see, https://www.jftc.go.jp/en/legislation_gls/unfairtradepractices.html
Legally speaking, this application means that in Japan, Google’s practices were sanctioned not because they restricted competition, but because they lessened it. Lessening competition in Japan (and not so differently in Korea) can be established at an earlier stage than restricting competition, much like the incipient violation doctrine under Sec 5 of the FTC Act. Under this regime, although pecuniary fines cannot be imposed, the burden of proof borne by the agency is significantly relaxed.
For instance, in order for the JFTC (similarly, the KFTC 공정거래위원회) to establish a violation on the grounds of lessening competition, no relevant market definition is required, and no full-scale analysis of anti-competitive effects needs to be conducted. Notably, the “restrictive condition” under para 12 of the GD does not need to be exclusive (unlike para 11, which does).
Indeed, in the Google decision, in the section discussing the consequences of the conduct (in the "前記２の行為の影響" part), the JFTC merely stated that: 'in at least 80% of Android smartphones, Google’s search and browser services were found to be favored by pre-installation and better placement; and, in 50% of Android smartphones with the Play Store licensed, Google’s search and browser services were found to be better treated.' (very roughly summarized by me.)
From these descriptions, one may infer the potential relevant markets and the exclusionary effects the JFTC may have had in mind, but, obviously, they were neither explicitly defined nor analyzed in the decision.
Isn’t it cool? I find that the prohibition of UTPs is an ideal tool, particularly for competition authorities eager to change large tech companies’ practices without bearing a hefty burden of proof. If I'm not mistaken, this has been a key driving force behind the introduction of digital competition regulations like the DMA in many jurisdictions.
Lucky JFTC to have such an efficient tool! And I’m glad that Korea has the same tool (although in Korea, only 'exclusive' dealing can be addressed. But don't despair. KFTC can impose fines). Fair enough. The JFTC and the KFTC both have a powerful tool at their disposal. Korea, often criticized for over-enforcement, hardly needs to be mentioned—and as demonstrated in the Google case, the UTPs tool has now been explicitly proven effective in Japan.
So then, why does the JFTC need the Smartphone Act? And, in the same vein, why does the KFTC need the amendments modeled after Sec 19A GWB?
I’ve been struggling to understand the rationale behind the two agencies’ regulatory moves from the perspective of fixing market failure, but I still fail to get any reasonable nods from them. Would the two agencies have shown the same eagerness to 'regulate' digital platforms if the EU hadn’t introduced the DMA? I’m unsure. But seeing that competition law enforcement remains effective, especially in the two jurisdictions where local players are active, leaves me pondering.
Charles McConnell, 'Japan hits Google with cease-and-desist over Android bundling' GCR (Apr 15, 2025) https://globalcompetitionreview.com/article/japan-hits-google-cease-and-desist-over-android-bundling
The JFTC's Press release (Apr 15, 2025) https://www.jftc.go.jp/houdou/pressrelease/2025/apr/250415_digijyo.html
Japan’s Fair Trade Commission has ordered Google to stop tying its search and browser apps to Android smartphones, issuing its first formal finding against a global digital platform but opting not to impose a fine.
