Photo/Illutration Smartphones are indispensable tools for our daily lives. (Asahi Shimbun file photo)

The government is considering new regulatory rules to curb the control of the smartphone app market by U.S. information technology giants Apple Inc. and Google LLC through their dominant operating systems (OS).

While it is desirable to promote competition in the market to mitigate the evils of the dominance by the two companies, that should not be done at the expense of safety and privacy protection, which are also vital for smartphone users. The rules need to be designed to achieve both these goals.

The government’s Headquarters for Digital Market Competition released on June 16 its final report of “Competition Assessment of Mobile Ecosystem.” The report calls for introducing a regulatory rule that effectively requires Apple to make it possible to buy apps for the iPhone from marketplaces other than the company’s App Store.

The report also proposes to ban the companies owning the dominant OS from forcing customers to use their own payment systems for purchases through their apps. The government plans to submit a bill to introduce these new regulations to the Diet during next year’s ordinary session, if possible.

During the panel’s meetings, its members pointed out that insufficient competitive pressure in the market may be a factor in keeping the fees that app developers pay to the tech giants high. Apple, on the other hand, asserted that it is maintaining the safety of the apps for its mobile devices by limiting them to those offered at its store and screening all the apps rigorously.

In opinions submitted for public comment on this matter, a consumer group expressed concerns about the effects of the proposed steps on the safety of devices.

The final report recognizes the importance of also securing privacy and safety for apps offered in marketplaces other than Apple’s own store. Proposed measures to achieve the goal include a system under which Apple inspects app stores operated by other companies and sell their offerings through its store or preinstalling apps in smartphones.

But the report decided not to propose requiring Apple to allow obtaining apps directly through browsers without using the store.

Since smartphones are widely used as a key access point to a wide range of services, the companies controlling the dominant OS have enormous influences. Given the internet’s tendency to perpetuate oligopoly, it is essential to establish rules for promoting proper competition. If more competition leads to wider app options or lower prices, consumers would win.

Smartphones, however, are also treasure troves of personal information. Rules for promoting competition would only be counterproductive if they lead to the spread of malicious apps that threaten safety and privacy or make consumers anxious. More assessments are needed to determine whether the measures proposed in the final report would really ensure safety.

Another big question is whether the envisioned new regulatory rules will actually promote competition in the market.

Google allows users of its smartphone OS to install apps from marketplaces other than its Google Store. But most of the apps obtained by users of its mobile OS are downloaded from the store.

Even if the new rules require the two companies to allow obtaining apps from other providers, there would be no significant increase in competition if consumers continue using their stores.

In drafting the bill, the government needs to design the new rules carefully so that they will ensure both greater competition and sufficient safety.

--The Asahi Shimbun, July 2

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