Japan: Entry into force with grace period of Bill on Promoting Competition Regarding Specific Software Used in Smartphones including competition authority governance

On 19 June 2024, the Bill on Promoting Competition Regarding Specific Software Used in Smartphones was promulgated, with a grace period on the effectiveness of most of its provisions. The effective date of these provisions will be established by government ordinance within one and a half years of the promulgation. The Bill gives the Fair Trade Commission (FTC) the power to designate and regulate business operators providing “specific software”, which includes basic operating software, app stores, browsers, and search engines. The criteria and thresholds that the FTC will consider for its determination will be established by Cabinet Order. Business operators providing “specific software” that exceeds a specified threshold based on user numbers or other indicators will be required to notify the FTC, which will assess the information provided and issue determine if the provider offers the “specific software”. The FTC will investigate compliance with the Bill and impose corrective measures, penalties of up to JPY 300 million and surcharge in an amount equivalent to 20 % or 30 % in case of previous violations.