Japan's Fair Trade Commission (FTC) has issued an order to Google, a subsidiary of Alphabet Inc., to cease its alleged abuse of market power over local smartphone manufacturers. The order, which was announced on Tuesday, reiterates the FTC's earlier finding that Google has been taking advantage of its position as the provider of the Google Play app ecosystem to force Japanese phone makers to prioritize its apps and services on their devices.
The move comes ahead of high-stakes trade negotiations between Japan and the US, with Economic Revitalization Minister Ryosei Akazawa set to visit the US to press for a reprieve from President Donald Trump's tariffs on Japanese products. The FTC's order also follows a complaint by the Office of the US Trade Representative that Japan's Digital Platform Act disproportionately affects American companies and undermines their competitiveness in Japan.
According to the FTC, Google has been capitalizing on the struggles of Japanese smartphone makers, such as Sony Group Corp. and Sharp Corp., to retain market share in a country where Apple Inc. is the leading smartphone brand. Google allegedly demanded that these manufacturers bundle the Chrome browser and promote it on each handset's home screen, and offered to share ad revenue with them if they agreed not to preload search engines from its rivals.
The order marks Japan's first cease-and-desist command to a leading US tech firm, and follows examples set by regulators around the world. The EU has previously rebuked both Google and Apple for using allegedly illegal tactics to dominate mobile software markets, while the US Justice Department is considering asking a federal judge to force Google to sell off parts of its business after a federal judge ruled that the company illegally monopolized the search market.
Google has expressed disappointment in the Japanese watchdog's conclusions and has proposed solutions to the regulator. The company has a significant stake in the Japanese market, with the US selling over $45 billion in services to Japan last year, including licensing fees for Android's app ecosystem and advertising revenue. The order is likely to have significant implications for Google's business in Japan and may set a precedent for other regulators to take action against the company's alleged abuse of market power.
