Nations Work Together to Counter Influence of Apple, Google

The Yomiuri Shimbun

6:00 JST, June 22, 2023

The Japanese government has drawn up a set of regulations targeting tech giants in Japan. The following is the second installment in a series examining the clash between the government and big tech companies amid global efforts to toughen tech rules.

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The international siege on giant tech companies is gaining focus as a conference in Tokyo in March brought together antitrust authorities from about 50 countries and regions, including the United States, the United Kingdom and Europe.

The conference was part of efforts to promote international cooperation in the fight against tech giants.

Participants in the session reported one after another that they are having a hard time coping with the growing influence of tech giants. The European Commission officials said that authorities need to act faster in the digital world but have fewer resources, and Britain’s Competition and Markets Authority said that existing laws have limitations.

The tech giants are a magnet for the best and brightest people and are very formidable, said a senior official from Japan’s Fair Trade Commission. Applause broke out after the official concluded the report by calling for close cooperation and gathering wisdom from all over the world.

The secretariat of the government’s Digital Market Competition Headquarters, which led the discussion on regulation, only has about 20 staff members, including officials from the Economy, Trade and Industry Ministry, the Internal Affairs and Communications Ministry and the Japan Fair Trade Commission.

In contrast, the tech giants, known as GAFA, employ former ministry bureaucrats as lobbyists, and have a large group of experts to counter the government’s regulatory initiatives.

“[The lobbyists for the tech giants] were originally in government offices, and they know who the key players are, who is friend and who is foe,” a former Cabinet member said.

GAFA, which has been using its abundant funds to lobby in the United States too, tried to prevent the passage of a huge IT firm regulatory bill in the U.S. Congress in 2022, forcing it to be repealed.

Their litigation skills are also formidable. For example, Apple won most of its legal battles with U.S. game companies over its App Store with an all-star team of lawyers.

In past investigations by the FTC, Amazon is said to have used about 10 lawyers and a prominent economic analysis expert to argue the validity of its claims.

It is becoming increasingly difficult for a single country’s government to stand alone against what one senior Cabinet official calls the “too-powerful” tech giants. The key to standing up to them is to build an international siege network.

The Japanese government has been paying close attention to trends in Europe, which has been ahead of Japan in setting the direction of regulations.

The European Union’s Digital Markets Act, which took effect in May, includes provisions similar to the Japanese proposal — such as the requirement to open up app marketplaces and the prohibition of the forced use of payment systems.

In the United States, where regulation once failed, the U.S. government released a report in February calling for the creation of new legislation, including a requirement to open up app marketplaces. The administration of U.S. President Joe Biden also has not given up on the idea of introducing regulations.

“We often share information with foreign countries on how to make effective laws,” a Japanese government official said.

A common understanding has arisen among authorities that if there are shortcomings in the regulations of a leading country or region, the latecomer will fill in the gaps.

It appears to be a process of governments around the world working together to create effective tech regulation.