Sunday, December 08, 2019

IT players in Japan to come under closer watch

Feb 18. 2019
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By THE YOMIURI SHIMBUN
ASIA NEWS NETWORK
TOKYO

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THE JAPANESE government is finalising plans for a new organisation dedicated to comprehensively monitoring the business dealings of large IT companies and formulating policies to ensure transparency in their practices.

The new regulator will be established as early as the second half of the year under the Cabinet Secretariat.

The Fair Trade Commission likely will be able to conduct unannounced checks on these companies based on information collated by the new organisation.

The new body also will consider legislation pertaining to fair business transactions involving large IT companies. Prime Minister Shinzo Abe has instructed a meeting of the Council on Investments for the Future to consider how such a |specialist organisation should operate.

During the meeting held at the Prime Minister’s Office, Abe called for the establishment of a system free of the vertical divisions among government bodies, which would make it possible to respond swiftly and with expertise to coordinate competition policies in digital marketplaces.

The prime minister chairs this council.

At the forefront of the government’s mind is GAFA — the four US companies of Google, Apple, Facebook and Amazon.com.

While these huge companies offer useful services including online shopping and searches, they are crafting an oligopoly in these markets partly due to the personal information they have accumulated.

The new organisation’s secretariat will be formed from staff seconded from the commission and the Economy, Trade and Industry Ministry, as well as experts in law, information engineering and other fields.

The government decided that responding to rapidly changing digital markets “would be difficult using only the expertise of existing government regulatory authorities,” a government source said.

In addition to checking whether there are any problematic practices conducted by the large IT companies, the new organisation’s functions are expected to include drawing up guidelines and formulating legislation. It plans to consider a legal framework designed to make their business transactions more transparent, such as by requiring them to disclose important contract conditions. Its structure also will make regulations more effective through surprise checks by the commission.

The new organisation also will launch measures in situations when a large IT company purchases a start-up company expected to grow at an early stage and strengthens their dominance by monopolizing data.

A data oligopoly created through the acquisition of startups became a major issue when Facebook bought major messaging app WhatsApp in 2014 for about 2 trillion yen.

 

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