Reining in Smartphone Ecosystems and App Stores: A Critique of the Japanese Smartphone Act in Comparison to EU and U.S. Regulatory Approaches

Abstract

In June 2024, Japan enacted the Act on Promotion of Competition for Specified Smartphone Software, a new legislative measure aimed at regulating smartphone ecosystems. This article examines and compares the Act, commonly known as the “Japanese Smartphone Act,” to the European Union (EU) and U.S. regulatory approaches. The examination begins with the neutrality principle, which serves as the foundation of the Act, concluding that this principle should be refrained from since it prevents platform operators from governing their platforms. Next, the examination addresses regulations against unfair and exploitative conduct toward app providers, concluding that such conduct should be subject to regulation under competition law, adhering to the rule of reason principle. Finally, the examination outlines measures to facilitate app store openness, cautioning against micromanaging smartphone design details by regulators. It recommends that instead of ex ante rules, competition law should govern smartphone ecosystems.