Japan must toughen regulations if ‘joint approach’ e-commerce law fails: lawmaker

TOKYO (Reuters) – Japanese policymakers must keep open the possibility of tightening regulations on tech giants if an e-commerce law introduced this month does not work as expected, said a lawmaker overseeing the party’s deliberations in power over competition policy.

On February 1, Japan joined a global trend for increased scrutiny of possible antitrust activity by big names in technology with legislation requiring the disclosure of information such as the terms of contracts with business partners, the operation of search rankings and the reasons for suspension or denial of providers.

The law, which offers flexibility in the amount of information businesses must submit, comes as authorities in Europe, Australia and elsewhere face the influence of global e-commerce and e-commerce companies. social media, concerned about their significant market dominance.

“If this joint regulatory approach is not enough, we must take a further step within the rules,” Tatsuya Ito, a ruling Liberal Democratic Party (LDP) MP, told Reuters on Wednesday.

Ito, who oversees competition policy on the LDP’s powerful policy research council, called the law “light,” saying policymakers should assess how it works before taking further action or extend its reach.

Japan’s e-commerce market was worth 19 trillion yen ($ 180 billion) in 2019. Its app store market reached $ 20.2 billion in 2020, according to data from App Annie.

Amazon Inc and Rakuten Inc were the largest e-commerce operators in 2018, while the app store market was divided between Apple Inc and Alphabet Inc’s Google, a 2019 report from the Japan Fair Trade Commission (JFTC ).

Under the new law, operators of shopping sites and app stores with annual revenues in Japan of at least 300 billion yen and 200 billion yen, respectively, must submit annual reports to the Ministry of Economy. , Commerce and Industry.

The ministry can then issue improvement orders if operators do not follow its recommendations, or refer operators to the JFTC if they suspect antitrust activity.

Critics, however, said the law lacks bite compared to those provided by the European Union, under which regulators can impose fines and even dissolve companies.

Antitrust expert Yosuke Okada, a professor at Hitotsubashi University, said the law is more of a cooperative type of regulation aimed at collecting information about the operations of companies.

“It is not a framework in which companies are regulated in a very detailed way,” he said.

Moreover, any imposition of fines would likely require a large-scale reform of the anti-monopoly law, Ito said.

“It’s important to see how many results can be achieved while moving forward in rule making and responding to digital platforms,” he added.

Separately on Wednesday, the antitrust watchdog described actions in digital advertising that may constitute an abuse of any dominant trading position. Such actions include improper use of personal data and unilateral modification of contract conditions.

($ 1 = 105,7800 yen)

Reporting by Daniel Leussink; Additional reporting by Takaya Yamaguchi; Editing by Christopher Cushing


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