Japan’s Fair Trade Commission ordered Google to stop allegedly abuse its market power over local smartphone manufacturers, while high-risk trade negotiations with the United States led this week.
Tuesday’s order reiterated the early discovery of the FTC that the U.S. tech giant took advantage of its position as a provider of the Google Play app ecosystem, the only viable alternative to the iPhone App Store. Regulators say Google incorrectly forces local phone manufacturers to prioritize their applications and services on their devices.
The announcement comes just ahead of Economic Revitalization Secretary Ryosei Akazawa’s plan to visit the United States this week, demanding President Donald Trump suspended the tariffs on Japanese products. Watchdog’s move also follows complaints from the Office of the U.S. Trade Representative, Japan’s digital platform law (designated to increase transparency for large technology providers) disproportionately affects U.S. companies and undermines their competitiveness in Japan by increasing compliance costs.
Despite the U.S. and Japan operating commodity deficits, its services remain, which include paying licensing fees for Android’s app ecosystem and advertising revenue. Last year, the United States sold more than $45 billion in seasonal adjustment services to Japan.
Google allegedly capitalized the struggle of Japanese smartphone manufacturers to retain market share in the country where Apple became the leading smartphone brand. According to the FTC, Google asked Japanese phone manufacturers, including Sony Group Corp. and Sharp Corp., to bundle Chrome and promote it on the home screen of each phone. Manufacturers comply because the Google Play app ecosystem is essential to provide phones that can use Apple phones toes.
If Google in Mountain View, California, agrees not to prepay search engines from its competitors, they also offer to share advertising revenue with device manufacturers, the FTC said. Google will highly prioritize ensuring this is when users get their first search service for a new phone, paying billions of dollars a year to secure a location on the iPhone.
Japan’s stop order marks the country’s first such order, marking any leading U.S. tech company and following examples set by global regulators. The EU has rebuked Google and Apple for using the illegal tactics it alleged to dominate the mobile software market, and the U.S. Department of Justice is considering asking a federal judge to force Google to sell some of its business after a federal judge ruled that the company illegally monopolizes the search market.
Google said in December that this was disappointed with the Japanese regulator’s conclusions and was a recommended solution to the regulator.
