Tag: Apple

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Japan set to double surcharges on Apple and Google antitrust violations

TOKYO, April 14, 2024—Coined after the EU digital markets act, the Japanese government is gearing to enact legislation that would penalize with double the current maximum surcharges on anti-monopoly acts of gatekeepers – effectively, Apple Inc. and Google Inc. alone – of their operating platforms’ market dominance.

The current surcharge is 1/10th of revenue identified connected to Anti-Monopoly Law violation acts. The surcharge on violations if committed and admitted by the two respective companies will be raised to 20 percent, and repeated violations will be subject to 30 percent.

The gatekeepers also would have to submit reports on their platform administration and activities to the Fair Trade Commission annually, and should suspected acts of violations were identified, JFTC would refer the cases to court.

In March, the U.S. Department of Justice sued Apple for violation of the antitrust act. The Japanese legislation is the second one after 2021, when it enforced the digital platform transaction transparency act that outlined detailed information disclosures on platforms.

The commission plans to have legislation adopted by the cabinet by the end of April for submitting the draft legislation to the Diet (parliament) immediately afterwards.

At issue that the JFTC is probing as potential antitrust problems is exclusivity of iOS and Android smart phone operation system-based applications developed and made public by third parties on their respective platforms. JFTC in the past pointed out to Apple about high fees the company collects from iOS application developers in selling them and exclusivity of not offering them on Android and other platforms of other gatekeepers.

JFTC also is expected to demand that consumers be given greater latitude in customizing the downloaded applications, as well as the two gatekeepers’ platform configurations to guide consumers to use the platforms and applications with priority.

Apple commands a lion’s share of both hardware and applications of Japan’s 2.2 trillion yen ($17 billion) smartphone hardware market, in which Apple iPhones accounts for nearly 51 percent. Google is a distant second with 14 percent.

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Risks of over-dependence on behemoths

TOKYO, Dec. 1, 2023—Elon Musk is teaching us something important about size, dominance, and famous brand loyalty: Keep a friendly arms-length distance from behemoths and avoid over-dependence on them.

Musk Nov. 29, 2023 sad at a New York Times DealBook Summit, ‘Go xxxx yourself!,’ to one of the biggest advertisers of X, formerly Twitter, according to media reports, analyzing that X’s survival is being timed.

Whether Musk’s expletives reverberate to his Tesla, Space-X and other businesses is unknown but in light of the U.S. government’s over-dependence on the two companies, damage is likely to be limited. NASA relies extensively for launching space probes and rovers on Space-X rockets, the Pentagon needs Musk’s Starlink satellites, and the White House’s transport electrification program needs Tesla’s charging stations, which commands more than 60 percent of U.S. charging units.

So Musk is effectively the un-appointed top secretary of the While House, like Henry Kissinger was for Richard Nixon and other presidents, his businesses woven inexplicably and tightly in American politics to society.

That’s what Musk is telling us to rethink more loudly, thank you. Over coming years, lawmakers, businesses, and consumers may pause before making choices for befriending with behemoths that dominate everything, from politics, marketplaces and products. Some already learned the perils of over-dependence on a single supplier: Germany on Russia for natural gas and the United States on China for toys and a whole gamut of consumer products.

Apple’s iPhones are another product that dominates some smartphone markets, including the U.S. and Japan, where market shares are 56 percent and 46 percent, respectively, though the levels are not irreversible. In a highly competitive global auto market, Toyota Motor is not a dominant existence, except in Japan, where its share has always exceeded 50 percent, empowering it to be the retail price setter.

What happens when a single business controls nearly all of a marketplace, like Amazon’s cloud service in Japan with over 90 percent market share of public-sector cloud services? Competition disappears, and even though the Japanese government recently picked a small, obscure IT company for a government cloud service, whether it can continue for long is seen with skeptical eyes.

In such a setting, breaking up monopolies may be one of the first policy tools likely to be considered, as already being mulled by the Department of Justice regarding Google, Amazon and other big techs.

While shying away from the dominant force, Toyota’s position in Japan can be comparable to Musk. Not only CEOs of rival Japanese automakers, politicians and business executives look up to Akio Toyoda, the company’s chair, when commenting on industrial policies, clearly with the view that the Japanese industry is underpinned by Toyota’s prosperity and absent it, the Japanese economy would be at the bottom of the OECD ranking.

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