Japan's parliament enacted Wednesday a law to promote competition in smartphone app stores by restricting tech giants Apple Inc. and Google LLC from limiting third-party companies from selling and operating apps on their platforms.
The law will prohibit the providers of Apple's iOS and Google's Android smartphone operating systems, app stores and payment platforms from preventing the sale of apps and services that directly compete with the native platforms' own.
The change is aimed at stopping the dominant players from gatekeeping and forcing them to engage in price competition with smaller challengers in hopes of benefiting consumers and promoting innovation.
The law will also prohibit the tech giants from giving priority to their own services in internet search results.
Violations of the new law will bring a penalty of 20 percent of the domestic revenue of the service found to have breached the rules. The fine can increase to 30 percent if the companies do not cease the anticompetitive practices.
The new penalty is more than triple the existing fine under the antimonopoly law, which imposes fines of 6 percent of revenue gained through services deemed to be using an anticompetitive edge.
The new law, expected to take effect by the end of 2025, follows a similar regulation introduced by the European Union in March.
The technology giants, which will be designated by the Fair Trade Commission, are to be required to submit regulatory compliance reports and will be monitored by the commission to ensure they are following the rules.
The legislation, which was approved by the House of Representatives in May, was enacted after being passed by the House of Councillors on Wednesday.
