Big technology companies have increased their presence as the new coronavirus outbreak has changed how people consume. The government should monitor their businesses so that a healthy competitive environment is not hampered.
A new law has been enacted to urge tech giants to conduct business transparently. The government aims to put the law into effect next spring.
The law will require companies to notify online shop operators before changes are made in rules and other contract items. It will also require them to disclose how search result rankings are determined when people search for merchandise. The companies will be obliged to submit a report to the central government once a year on how they have tackled these issues.
Likely targets are Amazon.com Inc., Google LLC and Apple Inc., which belong to the group of U.S. tech giants collectively dubbed GAFA, as well as Rakuten Inc. and Yahoo Japan Corp. among domestic companies.
These companies have a huge influence through online retail sites and smartphone app stores.
Some shop operators have complained, saying things like, “They forced us to accept a unilateral change in the contract to raise our fee” or “They demanded an unreasonable price cut.” Fair business practices must be ensured so that weaker business partners like these are protected.
The new law calls for tech companies to act voluntarily. Each company should recognize the importance of its role in society. It is essential to be willing to grow together with their business partners, focusing on information disclosure and appropriate responses to complaints.
On top of that, the government’s surveillance system will need to be effective. Inspection of the companies’ annual reports will be important. A thorough checking system should be created, for example by securing specialist personnel.
The government plans to set up a channel to compile opinions from business partners. It is hoped that detailed information about actual issues will be identified.
If a company fails to provide sufficient disclosure or meet other obligations, the government will issue a correction advisory and reveal its name. In serious cases that may constitute violations of the Antimonopoly Law, the Fair Trade Commission will be asked to address the matter. If wrongdoing is found, it is imperative that it be eliminated through strict application of the law.
The tech companies’ businesses are booming amid the outbreak of the new coronavirus. Amazon’s online shopping business expanded rapidly, as “nesting consumption” is growing due to people refraining from going out. Google’s sales are also growing, as video streaming and smartphone apps are seeing increased traffic.
As people are trying to adapt to a “new way of life,” online businesses have been gaining more importance. There are fears that the dominance of tech giants will further increase. The new law should be put to effective use.
Tech companies have been pouring their huge cash reserves into buying start-ups, which were potential future rivals, one after another, thereby promoting their oligopoly of the market. The government must intensify its vigilance to ensure that such moves will not be accelerated again by the pandemic.
— The original Japanese article appeared in The Yomiuri Shimbun on June 7, 2020