Photo/Illutration App icons on an iPhone (Asahi Shimbun file photo)

The Fair Trade Commission is planning legislation to curtail the power that Apple Inc. and Google LLC wield over smartphone apps, sources said.

The anti-monopoly watchdog is expected to submit the bill to the Diet during the ordinary session that convenes on Jan. 26.

It aims to ensure that users have more options for downloading apps and making payments on their smartphones, the sources said.

Apple’s iOS and Google’s Android effectively corner the global market of smartphone operating systems, which has allowed the two tech giants to dominate the market of app stores.

The proposed legislation would require platform operators, such as Apple and Google, to allow other companies’ app stores on their products--as long as they ensure security and privacy, the sources said.

Apple currently only allows its own App Store on iPhones.

The legislation would also prohibit platform operators from requiring app developers to use the operator’s own app store payment system, the sources said.

App makers are currently required to use the payment systems of Apple’s App Store on iPhones and Google’s Google Play, also known as Play Store, on Android-based smartphones.

The companies pay up to 30 percent of their app sales in commissions to Apple and Google, which weigh heavy on their earnings, the sources said.

In addition, the legislation would require platform operators to make it easier for smartphone users to change settings and install apps of their choice, the sources said.

Internet browsers and other apps developed by Apple and Google come pre-installed on iPhones and Android-based smartphones, respectively, making it difficult for users to choose rival apps, the sources said.

The legislation would also require platform operators to disclose details about updates to smartphone operating systems and other changes, the sources said.

The FTC is concerned that platform operators would bar rival app makers from developing innovations and limit options for smartphone users if they are allowed to stifle competition based on rules they set themselves, the sources said.

While the Anti-Monopoly Law is designed to deal with anti-competitive practices after the fact, the new legislation will supplement the law by preventing such acts in advance through “ex-ante regulations,” the sources said.

Platform operators are facing increasing pressure from regulatory authorities in other countries as well.

The European Union will begin full-scale implementation of the Digital Markets Act in March, which will apply a broad range of ex-ante regulations to platform operators.

Apple announced this month that it will allow app developers to use outside payment systems in the United States following a Supreme Court decision on App Store rules.

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