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Editorial: Speed up efforts to raise transparency of transactions conducted by IT giants

  • May 18, 2019
  • , The Japan News , 7:33 p.m.
  • JMH Translation

Moves to create regulations for information technology giants have entered the stage of determining the specifics.

 

A well-balanced institutional design is needed with consideration for how to enhance the transparency of transactions without interfering with technical innovation.

 

A government panel of experts has compiled a draft report aimed at ensuring fair competition in the online market by strengthening the Antimonopoly Law and establishing a new law. The government intends to work out the details based on the report.

 

While a succession of new online businesses has emerged, major players such as the so-called GAFA of U.S. firms Google LLC, Apple Inc., Facebook Inc. and Amazon.com Inc. have increased their market dominance.

 

Small and midsize companies that use services contracted with such IT companies have stood at a disadvantage. To protect them, efforts are urged to develop a workable framework at an early stage.

 

The Antimonopoly Law requires time to determine facts even though there are unfair practices. In the meantime, business partners could suffer greater disadvantages.

 

In light of this, new guidelines will be created to specify possible acts that could constitute violations of the law. It is reasonable to implement such measures to facilitate efforts to swiftly improve the situation.

 

There are hopes that self-restraint from any questionable acts will be an accompanying effect. Besides that, it is imperative for the Fair Trade Commission to make efforts to figure out the actual conditions by continuously investigating various online businesses.

 

The envisaged new law that will complement the Antimonopoly Law is said to likely require IT companies to disclose important information, including terms of contracts with their clients. Making public the names of companies violating the law and admonishing relevant firms to rectify their practices are among the measures to be considered.

 

Create workable rules

 

In a survey conducted by the FTC, many vendors doing business on online shopping sites said the terms of their contracts were “unilaterally revised,” among other responses. Given the current situation, the purpose of establishing the new law is understandable.

 

It is also a task to ensure the protection of personal information and the sound use of the data at the same time.

 

In efforts separately from the experts panel, the government’s Personal Information Protection Commission is considering strengthening regulations. The move was required amid concerns among many users over how their individual data are handled.

 

Regarding data such as browsing and purchase histories, a plan has come to the fore obliging companies to comply with requests in principle if individual users ask them not to use the data. A bill to revise the Law on the Protection of Personal Information is expected to be submitted to next year’s ordinary Diet session.

 

However, it is feared that excessive regulations could hamper convenience and nip new businesses in the bud.

 

For example, in May last year the European Union enforced the General Data Protection Regulation, which strictly regulates the processing of personal data. This regulation has been met with criticism for its strictness and placing a heavy burden on companies.

 

Using overseas cases as references, it is desired that rules will be devised based on actual conditions.

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