Google and Apple face Japan's toughest mobile platform rules yet

Japan's Mobile Software Competition Act took effect on December 17, 2025, marking the first comprehensive ex ante regulation of mobile platform operators in Asia to reach full enforcement. Google announced compliance measures the same day, introducing choice screens for search engines and browsers while expanding alternative payment options across all apps offering in-app purchases of digital content to Japanese users.

The enforcement date represents the culmination of an 18-month regulatory process that began with the law's passage in 2024. According to Google's announcement, "Today, the Japan Mobile Software Competition Act (MSCA) comes into force for companies who have been designated." The Japan Fair Trade Commission designated Apple and Google in March 2025, identifying their operating systems, app stores, browsers, and search engines as specified software services subject to the regulation's requirements.

The MSCA positions itself between the European Union's Digital Markets Act and the United Kingdom's Digital Markets, Competition and Consumers Act in regulatory approach. While the DMA applies uniform remedies to all designated gatekeepers, Japan's framework allows exceptions under narrowly defined circumstances. The law establishes self-executing obligations on designated providers under Articles 5-9, covering prohibited conduct, and Articles 10-13, addressing compliance requirements.

Compliance measures reshape Japanese mobile ecosystem

Google's compliance solution centers on three primary changes affecting consumer and business experiences on Android devices. Choice screens will prompt users to select search engines and browsers, appearing on Android phones as well as in the Chrome app on iOS devices in Japan. The company stated these options extend capabilities users could already access, though the MSCA mandates their prominent display.

Alternative in-app billing expands beyond the User Choice Billing program Google launched for non-gaming apps in 2022. The MSCA compliance extends this program to all applications offering in-app purchases of digital content to Japanese users. Developers can now offer alternative billing systems alongside Google Play's billing system, a requirement that mirrors provisions in the DMA but applies specifically to Japan's market.

The most significant operational change involves a new program enabling developers to offer side-by-side choices between Google Play Billing and completing purchases on developer websites. Google described this as enhancing "developer choice and flexibility on Google Play." The program carries competitive fee offerings but subjects participating developers to security and user safety requirements. Developers can begin onboarding immediately, with APIs becoming available shortly for full implementation.

Apple implemented parallel changes through iOS 26.2 release on December 17, introducing alternative app distribution channels and payment processing options. The company's announcement emphasized security frameworks designed to address what it characterizes as risks created by the legislation. Alternative app marketplaces can now operate on iOS in Japan, though Apple maintains guardrails for apps in the Kids category and users under 18 years old.

Technical requirements establish high compliance thresholds

The July 2025 Guidelines issued by the Japan Fair Trade Commission flesh out the scope and content of substantive obligations presented in the MSCA. These Guidelines provide detailed clarification on obligations for designated providers, establishing specific hypothetical scenarios where violations may occur and defining concepts embedded in each provision.

Article 5 MSCA prohibits unjust use of acquired data, preventing designated providers from using data obtained through specified software to competitively benefit their own goods or services. The prohibition covers data related to user attributes, device identifiers, and payment information. According to the Guidelines, designated providers must establish effective internal systems to ensure compliance, with the JFTC terming such systems "crucial" given the difficulty of externally verifying data usage.

The data siloing requirements exclude publicly available information that business users can access through webpages, app stores, or market information services. However, the JFTC highlights that external verification challenges make internal compliance systems essential. This approach shifts responsibility to designated providers for demonstrating adherence rather than regulators proving violations.

Article 6 MSCA addresses unfair treatment of app providers, mirroring the FRAND-like mandate under Article 6(12) DMA. The provision regulates various forms of unfair treatment during app reviews, whether for inclusion on app stores or for allowing alternative app stores to distribute on operating systems. Two cumulative legal requirements must be met: the review must involve unjust discrimination or otherwise unfair treatment, and it must be administered without reasonable grounds or inconsistently with established criteria.

The Guidelines define unjust discriminatory treatment as different treatment of third parties without reasonable grounds, either compared to the designated provider's own services or between different third parties. When actions restrict business activities or cause disadvantages without necessity or reasonableness, they constitute "otherwise unfair treatment." The Guidelines measure unfairness against necessity and reasonableness benchmarks, allowing broad application to reviews differing from previous instances.

Alternative distribution faces technical and financial barriers

Article 7(i) MSCA prohibits hindering alternative app store provision on designated operating systems. The prohibition captures both direct actions refusing to license app stores and indirect actions making distribution difficult. To establish a violation, such actions need not make operations impossible but must create a high likelihood of making it difficult for businesses to provide app stores and for users to employ them.

The Guidelines provide extensive hypothetical violations. Designated providers cannot set requirements related to business scale or financial status as conditions for alternative app store provision. Usage fees imposed on alternative app store providers may violate the provision when calculation criteria differ from fees imposed on apps. The JFTC specifically notes that fees must be explained to alternative app store providers regarding reasonableness relative to benefits derived by designated providers.

These requirements echo concerns raised about Apple's initial DMA compliance measures, which included financial stability requirements compelling alternative app marketplace operators to provide standby letters of credit from A-rated financial institutions in amounts reaching EUR 1,000,000. The Japanese Guidelines similarly identify such requirements as potentially violating Article 7(i) MSCA.

Designated providers face restrictions on complicating user experiences when downloading and installing alternative app stores. This addresses feedback stakeholders provided during Google's DMA compliance workshops regarding user journey complications when installing alternative app stores. The JFTC Guidelines specifically exclude systematic warning messages suggesting alternative app stores are unsafe, noting the same purpose can be achieved through necessary reviews.

Justifiable grounds establish limited exception framework

The MSCA permits designated providers to invoke justifiable reasons for specific provisions, though the Guidelines establish a closed list of acceptable justifications. These reasons include cybersecurity protection, information protection relating to smartphone users, safeguarding minors, ensuring physical safety of smartphone hardware, and preventing criminal activities conducted using smartphones.

Beyond these five reasons, designated providers cannot raise further justifications for exemptions. Even when invoking permitted justifications, designated providers must conduct necessity and proportionality tests, checking whether less restrictive means could achieve the same purpose. This requirement parallels approaches in the DMA but applies more narrowly in the Japanese context.

Article 7(ii) MSCA addresses vertical interoperability, prohibiting designated providers from preventing businesses from using operating system functions with equivalent performance for app provision. The Guidelines mirror implementation measures the European Commission imposed on Apple when interpreting Article 6(7) DMA, requiring equivalence in functionality available to third parties rather than identical technical means.

Apple communicated to the JFTC that operating system function access obligations should apply only when third parties use technology for the same use case as designated providers. However, the Guidelines establish that designated providers must provide comparable functionality levels to competitors, even if through different technical approaches.

Self-preferencing rules target search algorithm fairness

Article 9 MSCA prohibits self-preferencing in search services but differs from Article 6(5) DMA in scope and application. The MSCA binds preferential treatment to unfair and discriminatory algorithmic terms. When search algorithm criteria themselves are unfair or discriminatory and favor designated providers' goods or services, violations may occur.

The JFTC enlarges the provision's scope to comprise all forms of potential discrimination crystallizing in competing goods and services receiving rankings separate from or lower than they would receive under fair and non-discriminatory terms. If only data related to designated providers is crawled and indexed into algorithms, violations may exist absent legitimate reasons.

Due to search result opacity and underlying algorithmic complexity, the Guidelines recognize that fairness is not easily verifiable by third parties. The JFTC proposes designated providers should disclose main parameters used for setting search algorithms determining rankings, along with reasons for different treatment administered in search results. The regulator advocates transparency in quasi-full disclosure fashion to accommodate fair search engine market needs.

Self-preferencing prohibition under Article 9 MSCA softens strict legal requirements compared to Articles 5-8. The Guidelines recognize that search service quality improvement for smartphone users, including responsiveness and accuracy expectations, may constitute justifiable reasons. Quality improvements may relate to single changes in display methods or multiple sufficiently related changes.

However, the JFTC adds supplementary tests requiring designated providers to concretely and specifically demonstrate service quality increases. Providers must provide evidence of impacts on users, notably through conducting user tests. Other recognized reasons include ensuring smartphone user safety where necessary and proportionate by restricting certain webpages or displaying designated provider information more prominently.

Transparency requirements complement enforcement measures

Articles 10-13 MSCA enhance awareness among competitors regarding designated provider service functioning. These provisions seek to increase transparency levels to which designated providers are subject, beyond explanations they provide to economic agents depending on them.

Article 10(i) MSCA ensures compliance with Article 5 MSCA regarding unfair data use does not go unseen. Designated providers must disclose conditions by which they acquire and use data, resolving difficulty of externally verifying acquired data use. Article 10(ii) expands disclosure obligations to reach consumers, complementing provider-regulator communication.

Article 12 MSCA requires designated providers for operating systems and browsers to implement measures ensuring default settings can be changed through simple operations. These measures include displaying choice screens for selecting browsers following Article 8(iii) MSCA general premise.

Article 13 MSCA acts as the cornerstone of designated provider compliance solutions. Beyond submitting compliance reports to the JFTC, designated providers must implement measures ensuring third parties can seamlessly respond when business model changes occur. They must disclose new specifications within reasonable periods, allowing business users to adapt and establish adequate complaint-handling mechanisms.

Designated providers must also provide sufficient information when third-party services have been entirely or partially suspended. This general obligation extends beyond typical platform-provider communications, establishing proactive disclosure requirements.

Global regulatory convergence accelerates platform accountability

Japan's enforcement follows similar regulatory actions in other jurisdictions. The Japan Fair Trade Commission issued a cease-and-desist order against Google in April 2025 for restricting competition in smartphone search through exclusive distribution agreements. That action addressed Mobile Application Distribution Agreements and Revenue Sharing Agreements affecting approximately 80 percent of Android smartphones sold in Japan as of December 2023.

The regulatory transformation in Japan contrasts with stalled initiatives in other Asian markets. Similar efforts in India and South Korea faced obstacles due to US administration trade talk impacts, with stopping such regulations becoming preconditions for favorable trade intentions. Japan's MSCA, however, advanced without comparable external pressure.

The European Union designated gatekeepers under the DMA in September 2023, leading to significant changes throughout 2024 and 2025. Apple faced €500 million in fines and Meta received €200 million for DMA violations. The Japanese approach incorporates lessons from these enforcement experiences while establishing independent regulatory frameworks.

Google stated it worked constructively with the JFTC for 18 months, appreciating collaboration on compliance solutions. The company shared how regulations in other countries led to difficult tradeoffs negatively impacting users and businesses. The MSCA includes safeguards allowing "justifiable grounds" to protect cybersecurity, privacy, and user safety interests, helping minimize risks that useful features might be unintentionally lost through compliance.

A recent survey of Japanese developers showed 79 percent are concerned about security risks associated with distributing in-app digital content through channels outside major app stores. These findings underscore implementation detail importance and the need for constructive regulatory engagement and careful enforcement to avoid unintended consequences.

Developer ecosystem adapts to new distribution options

The User Choice Billing program Google expanded under MSCA compliance had been available for non-gaming apps in Japan since 2022. That program allowed developers to offer alternative billing systems alongside Google Play's billing system for in-app digital content purchases. The MSCA expansion to all apps offering in-app purchases represents significant scope broadening affecting gaming applications previously excluded.

The new program enabling purchases on developer websites introduces additional complexity for app developers. While enhancing choice and flexibility, the program subjects developers to important user safety and security requirements. Google indicated developers can begin onboarding processes now, with API access coming shortly for full implementation.

For users under 18 years old, apps using alternative payment processing or website transaction links must include parental gates requiring younger users to involve parents or guardians before purchases. For users under 13 years old, apps cannot link to websites for transactions at all. Apple stated it worked with Japanese regulators to preserve these guardrails.

Apps in the Kids category on the App Store will not include website transaction links "to reduce the risk of fraud or scams targeting children," according to Apple's documentation. These age-based restrictions reflect regulatory emphasis on protecting vulnerable user populations while expanding developer distribution options.

Market impact extends beyond immediate compliance requirements

The MSCA's implementation carries implications for advertising technology infrastructure and digital marketing operations in Japan. Alternative payment systems and app distribution channels affect attribution modeling and conversion tracking capabilities that advertisers rely upon for campaign optimization.

Google AdMob introduced consent syncing for European regulation messages on November 10, 2025, synchronizing user consent decisions across multiple apps to reduce redundant consent prompts. Similar technical adaptations may become necessary in Japan as alternative distribution channels proliferate and payment management services diversify.

The regulatory framework creates tension between privacy protection, user experience, and competitive fairness in digital advertising markets. Designated providers cannot use privacy as justification for rules disproportionately burdening competitors while benefiting their own services. Regulators increasingly scrutinize whether technical implementations serve legitimate privacy objectives or function as competitive barriers protecting platform owners' commercial interests.

Cloud infrastructure dependencies add complexity to the regulatory landscape. The European Commission launched market investigations into Amazon Web Services and Microsoft Azure on November 18, 2025, examining whether these services should be designated as gatekeepers. Similar questions may emerge in Japan as cloud computing services become increasingly central to mobile application ecosystems.

The advertising technology sector's adaptation to evolving regulatory requirements demonstrates ongoing tension between innovation incentives and market fairness mandates. Travel industry stakeholders called for stricter Google DMA enforcement in July 2025, arguing self-preferencing violations benefit only Google while harming businesses and consumers. Parallel concerns may surface in Japan as implementation proceeds.

Enforcement mechanisms establish ongoing compliance obligations

The MSCA's designation process differs from the DMA's threshold-based approach. The JFTC designated three companies in March 2025: Apple Inc. for its operating system, app store, and browser; iTunes K.K., Apple's Japanese subsidiary jointly operating the App Store; and Google LLC for its operating system, app store, browser, and search engine. This designation makes them subject to obligations fully effective on December 17, 2025.

The Guidelines establish that designated providers must proactively engage with third parties, explaining how their conduct is fair. This goes beyond typical compliance verification, requiring providers to furnish reasons and evidence demonstrating non-discriminatory and fair treatment. The proactive engagement requirement shifts burden from regulators proving violations to platforms demonstrating compliance.

For Article 5 MSCA data usage prohibitions, the JFTC directly indicates regulatory targets must establish effective internal systems to ensure compliance. External verification difficulty makes internal system establishment crucial for meeting expectations. This approach parallels but exceeds data siloing attempts competition authorities imposed on undertakings in other jurisdictions.

The JFTC will meter infringements by assessing whether high likelihood of exclusion and harm exists, considering designated provider action nature, duration, and impact. This standard applies to Articles 7(i) and 7(ii) MSCA, covering alternative app store distribution and operating system function access. The high likelihood threshold requires demonstrating difficulty rather than impossibility for businesses to operate and users to employ services.

Regional regulatory approaches diverge in implementation details

The MSCA stands halfway between institutional designs of the EU's DMA and UK's DMCCA. It applies self-executing obligations to designated providers but provides scope for leeway through justifiable grounds provisions. This contrasts with the DMA's application of all remedies to designated gatekeepers regardless of specific service characteristics.

Not all services remain equally impacted by every MSCA provision. Article 9 addresses only search engines, while most provisions tackle operating systems, app stores, and browsers. The limited Article 9 scope might reflect potential for unduly expansive self-preferencing prohibition reach in mobile ecosystems if applied to other specified software services.

Articles 5-13 are quite specific in content and mandates they introduce for each designated provider mobile ecosystem component. The legislator and JFTC flesh out specific meaning rather than leaving providers to decide how provisions fit services. This specificity reduces interpretive flexibility but provides clearer compliance roadmaps.

The Guidelines walk readers through reasonable grounds that may result in provision inapplicability, including statutory justifications under Articles 7 and 8(i)-(iii) MSCA and legitimate reasons under Article 9. The JFTC goes into greater detail for some obligations compared to others, reflecting varying complexity levels and enforcement priorities.

Strategic implications reshape competitive dynamics

Google's ability to maintain ecosystem safety and security remains paramount. The company emphasized that MSCA safeguards allowing justifiable grounds help reduce concerns about useful features being unintentionally lost through compliance. This framing positions security and privacy protections as legitimate business interests rather than anticompetitive barriers.

The JFTC committed to the compliance process through close partnership on changes designated providers are making. During discussions, Google shared how regulations in other countries led to difficult tradeoffs negatively impacting users and businesses. The regulatory dialogue approach seeks to balance competition promotion with innovation preservation.

Apple characterized regulatory compliance challenges in Japan as mirroring concerns expressed about European DMA implementation. In September 2025, Apple released comprehensive criticism of how the DMA created feature limitations and security compromises for EU users. Alternative app marketplaces now operate on iOS in Europe, including AltStore PAL, Epic Games Store, Setapp Mobile, and Aptoide.

The regulatory compliance landscape continues evolving as authorities assess compliance efforts. Meta challenged the European Commission's DMA decision in July 2025, arguing the ruling ignored a July 2023 European Court of Justice judgment. These appeals establish precedents affecting how similar regulations in other jurisdictions may be interpreted and enforced.

Digital competition expert Dr. Christophe Carugati identified artificial intelligence, digital competition regimes, digital mergers, and competitiveness as key priority areas for 2025-2026. The intersection of AI development and platform regulation adds complexity to enforcement considerations, particularly regarding algorithmic transparency requirements under Article 9 MSCA.

Looking forward: implementation challenges and market evolution

The December 17 enforcement date marks the beginning rather than conclusion of the MSCA's regulatory impact. Designated providers face ongoing compliance monitoring requirements, with the JFTC empowered to assess whether obligations are met and determine necessary enforcement actions.

Google stated it will continue working with the Japan Fair Trade Commission and industry to ensure it continues offering products and services that are helpful and safe for everyone in Japan. This commitment to ongoing dialogue reflects recognition that regulatory compliance represents an iterative process rather than one-time implementation.

The MSCA's effectiveness will depend on careful enforcement balancing competition promotion with innovation preservation. The law includes important safeguards through justifiable grounds provisions, but their application in practice will determine whether they serve as legitimate protections or loopholes undermining regulatory objectives.

For advertising technology stakeholders, the MSCA's implementation creates both opportunities and challenges. Alternative app distribution channels may provide new pathways for reaching users, while payment system diversification affects attribution and conversion tracking capabilities. Marketing professionals will need to adapt strategies to account for fragmented distribution and payment ecosystems.

The Japanese regulatory approach provides a model for other jurisdictions considering mobile platform regulation. Its balance between strict obligations and limited flexibility, combined with detailed Guidelines and ongoing regulatory dialogue, offers lessons for policymakers globally as they grapple with digital platform market power.

Timeline

• 2024: Japanese Government enacts Mobile Software Competition Act as first ex ante regulation addressing market power in Asia
• December 2024: JFTC promulgates Cabinet Order and Enforcement Rules establishing implementation framework
• March 2025: JFTC designates Apple Inc., iTunes K.K., and Google LLC as specified software providers under MSCA
• April 2025: JFTC issues cease-and-desist order against Google for restricting competition in smartphone search through exclusive agreements
• July 2025: JFTC issues Guidelines fleshing out scope and content of substantive MSCA obligations
• September 2023: European Commission designates six companies as gatekeepers under Digital Markets Act
• March 2024: DMA obligations become legally binding for designated gatekeepers
• April 2024: European Commission rules Meta's offering non-compliant with DMA
• December 22, 2025: Italian Competition Authority fines Apple €98.6 million for App Tracking Transparency violations
• December 17, 2025: MSCA enforcement begins; Google announces compliance measures including choice screens and alternative billing expansion
• December 17, 2025: Apple releases iOS 26.2 with alternative marketplaces and payment options for Japan

Summary

Who: Japan Fair Trade Commission enforces Mobile Software Competition Act obligations against designated providers Apple Inc., iTunes K.K., and Google LLC, affecting their operating systems, app stores, browsers, and search engines serving Japanese smartphone users.

What: The MSCA establishes comprehensive ex ante obligations prohibiting unfair data use, discriminatory treatment of app providers, hindering alternative app stores, restricting payment management services, tying user verification methods, and self-preferencing in search services. Compliance requirements mandate transparency in data acquisition, portability rights, default setting modifications, and proactive disclosure of specification changes.

When: The law took effect on December 17, 2025, following passage in 2024, designation of providers in March 2025, and publication of detailed implementation Guidelines in July 2025. This represents an 18-month regulatory process from enactment to enforcement.

Where: The regulation applies across Japan's mobile software ecosystem, covering smartphone operating systems, app stores, browsers, and search engines serving Japanese users. It affects both Android and iOS platforms, along with associated services provided by designated operators.

Why: Japan enacted the MSCA to promote fair competition and innovation in mobile software markets where platform operators wield significant market power. The regulation addresses concerns about anticompetitive conduct including data misuse, unfair treatment of app developers, restrictions on alternative distribution channels, and self-preferencing favoring platform operators' own services over competitors. The MSCA aims to create a level playing field while preserving legitimate cybersecurity, privacy, and user safety protections through narrowly defined justifiable grounds exceptions.