Photo/Illutration The logo of Google LLC at its headquarters in Mountain View, California (Asahi Shimbun file photo)

Japan’s Fair Trade Commission issued a cease-and-desist order to Google LLC on April 15 to stop forcing smartphone manufacturers to pre-install only its Google Search app.

The consumer watchdog agency said the requirement violated the Anti-Monopoly Law. 

This marked the first time the FTC has issued such a cease-and-desist order against one of the four global technology giants, which include Apple, Meta and Amazon.

The FTC sent a disciplinary measure plan in December to Google and has conducted hearings with the company to gather feedback. 

The measures included canceling contracts between Google and smartphone manufacturers supplying the Japanese market that the FTC identified as violating anti-monopoly laws. They also included preventing a recurrence.

Furthermore, for the first time with the cease-and-desist order, the measures include five years of monitoring and reporting to the watchdog by an independent third-party committee, given the highly technical digital aspects of this case.

If Google ignores the order, it will likely face penalties including fines.

After the order is issued, smartphone makers can freely choose which search app to initially install and its location on the smartphone interface.

According to the FTC announcement, since at least July 2020, Google contracted with six major smartphone manufacturers to install Google's Chrome and browser apps attached with Google Search on smartphones as default settings, and place them in a prominent location such as on the home screen.

This was a condition for allowing the installation of the Google Play app store on their smartphones.

The six manufacturers account for about 80 percent of the domestic market.

Google also had contracts that forbid the installation of competitors’ search apps with four manufacturers and one mobile carrier, as a condition for sharing a portion of Google’s advertising service revenues.

The FTC determined that Google may have excluded competitors from the search app market through these two conditions and hindered fair competition.

It determined that these transactions fell under the category of “trading on restrictive terms” prohibited by the Anti-Monopoly Law.

According to documents from the communications ministry, Google holds about 79 percent of the search market share on smartphones in Japan.

The company's sales in 2023 reached about $307 billion (44 trillion yen), with search advertising revenue accounting for about 60 percent of the $307 billion.

The FTC believes that Google has sought to solidify its current position at a time when search engines are changing with the rise of generative artificial intelligence.

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