Japan Passes Law to Allow Third-Party App Stores on the iPhone

New legislation in Japan requires Apple to allow third-party app stores and payment providers on the iPhone.

The Japanese parliament has passed the Act on Promotion of Competition for Specified Smartphone Software, a law that compels Apple to allow access to third-party app stores and payment providers on devices that run iOS. The legislation, which was passed by Japan's upper house and will be enforced following Cabinet approval within the next eighteen months, seeks to curb the dominance of major tech firms like Apple in the smartphone market.

The law requires Apple to make several significant changes to its business practices. The company will have to permit third-party app stores on its devices, just like it does in the EU. App developers will be allowed to use third-party payment services. There are also provisions to allow users to change default settings via new choice screens during setup, such as for selecting a default browser.

Apple will be forbidden from giving its own services preferential treatment in search results without a justifiable reason. The law also prohibits the use of data acquired about competing software to benefit its own apps. Additionally, the law requires that third-party developers have access to the same features as Apple's own apps and services, such as NFC for contactless payments.

Failure to comply with these new regulations could lead to fines amounting to 20 percent of relevant turnover, with the figure increasing to 30 percent for repeat offenses. In a statement to The Verge, Apple said:

The Japanese government made a number of changes to the legislation that will help protect user privacy, data security, innovation, and our intellectual property. We will continue our engagement with the JFTC during the implementation period as we remain concerned about how the law will impact Japanese consumers and the secure and private iPhone experience our users have come to expect.

The law is expected to be fully implemented by the end of 2025. Epic Games has already announced plans to bring Fortnite and its game store platform to iOS in Japan by late 2025.

Japan's move follows a trend of international legislative efforts aimed at regulating the dominance of major tech companies. The European Union's Digital Markets Act (DMA) and the UK's Digital Markets, Competition and Consumers Bill are similar initiatives designed to foster competition and prevent monopolistic practices. Various antitrust cases in the United States are also targeting similar issues.