Further improving Japan's e-commerce law and strengthening government supervision are key

Japanese lawmakers who oversee the ruling party's competition policy said they believe the country's policymakers must keep the option of tightening regulation of tech giants if an e-commerce law introduced this month fails to work as expected .

On Feb. 1, Japan expanded its scrutiny of antitrust activities by big tech companies with legislation requiring disclosure of information such as contract terms with business partners, how search rankings work and reasons for suspending or rejecting suppliers.

The law gives companies wiggle room on how much information they submit , as authorities in Europe , Australia and elsewhere worry about the power of global e-commerce and social media companies, which have significant market dominance.

"If this joint regulatory approach is not enough, we have to go further and create rules," Tatsuya Ito, a lawmaker from the ruling Liberal Democratic Party, told Reuters in an interview on Wednesday.

He argued that the law was "mild" and said policymakers must assess how it works before taking any further steps or expanding its scope.

In 2019, Japan's e-commerce market was worth 19 trillion yen ($180 billion) , and data from App Annie showed that Apple's App Store market reached $20.2 billion in 2020.

Amazon.com 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 by the Japan Fair Trade Commission ( JFTC) showed.

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

The ministry can issue improvement orders if operators do not follow its recommendations, and can refer operators to the JFTC if antitrust activity is suspected .

Critics , however, say the law lacks the force of enforcement compared with a planned EU law, under which regulators can impose fines or even break up companies.

Japan

government

Electronic Commerce Law