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Editorial: Regulations necessary to ensure IT firms protect data, compete fairly

  • December 18, 2019
  • , The Japan News , 7:25 p.m.
  • English Press

Huge information technology (IT) corporations have gathered massive amounts of customer information. There are strong concerns about the situation. The government needs to swiftly create and improve rules in a manner suited to the actual circumstances.

 

The government’s Conference for Digital Market Competition has put together a plan to urge both domestic and foreign IT companies to reinforce the protection of personal data and promote the transparency of their business transactions. The government will pursue such objectives as establishing a new law at next year’s ordinary Diet session and revising relevant legislation.

 

At a session of the conference, Chief Cabinet Secretary Yoshihide Suga said, “[The latest move] has shown how new rules should be laid down regarding the digital market.”

 

Presumed targets are “platform” corporations, such as U.S. firms Google, Apple Inc. and Amazon.com Inc. Rakuten Inc. and Yahoo Japan Corp. are also included.

 

There is good reason to tighten regulations on them, given their increasing influence on society through the provision of internet services and social media.

 

There are two main pillars for such regulations. One concerns how an environment for fair competition will be realized.

 

The envisaged law would oblige platform corporations operating large-scale online malls and app stores to disclose their contract terms while also regularly reporting their operational situations to the national government. If a platform company does not disclose such information, it would be issued an advisory with the name of the company revealed or be ordered to improve its methods.

 

The idea of expanding the list of regulatory targets to include other types of services will also be considered in the future.

 

Platform companies stand at an advantage in online malls, as they are the operators of such sites. Other businesses selling goods online find it difficult to say no when they suffer such disadvantages as unilateral changes to agreements and burdens incurred through coercive cost-sharing. The aim of rectifying such a situation is understandable.

 

The Fair Trade Commission intends to keep a closer watch for “abuse of a dominant bargaining position,” which is prohibited by the Antimonopoly Law. However, it takes time to grasp the realities involved. Establishing a new law to complement the Antimonopoly Law can be expected to restrain platform corporations in this respect.

 

The second pillar is protecting users.

 

The Personal Information Protection Law would be revised to ban not only platform firms, but all other companies, from inappropriately using personal information.

 

This concerns such data as “cookie” information that records what kinds of pages internet users have looked at. From a legal point of view, it may be that each little piece of such data on its own does not constitute personal information. However, when it is obvious that such data can be utilized as personal information by an entity to which it has been supplied, the provision of such information to third parties without the consent of the person to whom the information pertains would be prohibited.

 

The appropriate handling of personal information and fair competition will support the sound development of a data-based society. It is hoped that an effective system will be facilitated while taking care not to hinder technological innovation.

 

Internet business has been rapidly progressing. The government must seek to foster specialists familiar with the field of IT technology and increase their number, thereby expanding and improving its framework for supervision. It is also important to more closely cooperate with the United States and the European Union in this endeavor.

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