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Editorial: Expertise shortfall threatening Japan moves to regulate IT giants

  • August 31, 2019
  • , The Mainichi
  • English Press

A lack of information technology (IT) expertise among staffers at the Japan Fair Trade Commission (JFTC) will likely pose a challenge to regulating IT giants’ collection and use of personal data under proposed guidelines for the enforcement of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade.

 

IT giants are taking advantage of their monopolization of search and other online services to gather enormous quantities of personal information from users. They are then exploiting that information to feed advertising back to those same users, and raking in massive profits.

 

Under the proposed guidelines released recently by the JFTC, taking advantage of oversized market presence to gather and use personal information in an unfair manner would be regarded as the unjust use of one’s superior bargaining position banned under the law. It would be subject to a cease-and-desist order or a fine.

 

This “unjust use” commonly applies to cases where companies in stronger positions leverage their power to the detriment of subcontractors.

 

However, the primary purpose of the anti-monopoly law is to prevent market domination that impedes competition and unfairly pushes up the prices of goods and services, harming consumers.

 

Personal information is economically valuable. Under the circumstances, we appreciate that the JFTC is attempting to expand the scope of the anti-monopoly law to cover IT giants.

 

There have been a series of incidents in which IT giants have illicitly leaked users’ personal information or provided it to other parties without consent.

 

Recruit Career Co., which operates the job information website “Rikunabi,” has recently come under fire for selling to companies data on the probability that job-hunting students will decline informal job offers. The firm calculated this probability based on job-hunters’ browsing histories. The practice could constitute a violation of the anti-monopoly law in light of specific examples of “the unjust use of one’s superior bargaining position” included in the proposed guidelines.

 

The question is whether the guidelines can be effective. The draft states that a business can be deemed to have “a superior position” if it provides services that cannot be easily substituted. However, it will be difficult for the JFTC to actually deem IT giants as not having competing services, even though their sizes may differ wildly.

 

The JFTC is staffed by just under 840 employees, less than half that of the U.S. anti-monopoly watchdog, and there are not many workers well-versed in IT. It remains to be seen if the JFTC can deal with IT giants employing small armies of lawyers.

 

Japan has lagged behind other countries in regulating IT giants. The European Union has drastically strengthened its defense of personal information under the General Data Protection Regulation, which went into force in spring last year. Japan should swiftly create comprehensive rules, including revisions to the Act on the Protection of Personal Information expected for next year, to achieve a digital society where people can feel secure.

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