Japan’s Mobile Software Competition Act went into effect December 18, forcing Apple and Google to allow third-party app stores, alternative payment systems, and external browser engines. The Japan Fair Trade Commission (JFTC) designated both companies as “Specified Providers” in March 2025, making compliance mandatory, not optional. Violators face fines up to 20% of relevant service revenues.
What Actually Changed on December 18
The Act targets four monopoly choke points: operating systems (iOS/Android), app stores (App Store/Google Play), browsers (Safari/Chrome), and search engines (Google Search). Apple and Google must now:
| Requirement | Apple’s Response | Google’s Response |
|---|---|---|
| Alternative app stores | Third-party marketplaces allowed (must meet security standards) | Already supported sideloading; loosened restrictions |
| Alternative payments | Developers can link to external checkout, display prices | All apps (including games) can use non-Google billing |
| Browser engines | WebKit no longer mandatory—Chrome/Firefox can use own engines | N/A (Android always allowed) |
| Default app choice | Setup screens let users pick default browser, search, email | Choice screens during initial setup |
| Anti-steering | Apps can show “Pay on our website” buttons alongside App Store billing | Side-by-side display of Google Play vs external payment |
| Data firewalls | Must separate App Store analytics from first-party app data | Must prevent Play Store data from benefiting YouTube/Gmail |
The WebKit Breakthrough
Apple’s most significant concession: ending WebKit monopoly on iOS. Previously, Chrome and Firefox on iPhone were just Safari skins, all browsers used Apple’s rendering engine, limiting web app capabilities. Now Chromium and Gecko engines work natively, enabling progressive web apps (PWAs) with full feature parity to native apps. Developers can build checkout experiences in browsers that match native app UX without App Store approval.
How Google and Apple Are Actually Complying
Google’s approach: Expanded existing Android flexibility. Since 2022, non-game apps could use alternative billing in Japan. December 18 removed the “non-game” restriction, now all apps (including gaming, which generates 70% of app revenue) can bypass Google Play billing entirely. Developers display both payment options side-by-side; users choose.
Apple’s approach: Created approval process for third-party marketplaces requiring €1M standby letters of credit (proving financial stability), annual audits, and compliance with Apple’s security standards. Critics call this “creative compliance”, technically allowing alternatives while imposing barriers that deter most developers.
The €1M Barrier
Apple’s requirement that alternative app marketplace operators provide million-euro financial guarantees mirrors its EU Digital Markets Act compliance, which drew regulatory warnings for being unnecessarily restrictive. Japan’s JFTC explicitly warned against “creative compliance” tactics like imposing excessively burdensome approval processes. Whether Apple’s financial requirements qualify as legitimate security measures or disguised obstruction remains contested.
What This Means for Developers and Users
For developers: Bypass 15-30% platform commissions by routing transactions through own billing systems or payment partners like KOMOJU (supports Japan-specific methods like Konbini payments). A 2025 survey found nearly 70% of Japan’s top-grossing games already built web payment portals to avoid App Store fees—now they can link to them directly from apps.
For users: More payment options (credit cards, convenience store payments, carrier billing), potentially lower prices (developers can pass savings to consumers), and genuine browser choice on iPhone (Chrome with Chromium engine, not Safari disguised as Chrome).
The Hidden Costs
Alternative billing shifts responsibilities Apple/Google handled—refunds, fraud protection, payment disputes—onto developers. Small studios without dedicated operations teams now manage chargebacks, failed transactions, and customer service for payment issues. As KOMOJU notes: “This is a double-edged change: more room to experiment, but also more work to keep payments smooth and compliant.”
Japan vs EU: How They Differ
The Mobile Software Competition Act resembles the EU’s Digital Markets Act but with key differences:
- Flexibility: Japan allows exceptions for “security and privacy” if narrowly tailored and demonstrably necessary. The EU’s DMA is stricter, 23 mandatory obligations with fewer carve-outs.
- Scope: Japan targets specific services (OS, app stores, browsers, search). The DMA covers messaging, advertising, and platform-to-business relationships more broadly.
- Enforcement: JFTC requires annual compliance reports and can investigate proactively. The EU relies more on complaint-driven enforcement.
- Penalties: Japan caps fines at 20% of relevant service revenue. The EU goes up to 10% of global annual turnover for first violations, 20% for repeat offenses.
Japan’s approach is “stricter than nothing, softer than Europe”, enough teeth to force change, enough wiggle room to avoid Apple/Google threatening market exit.
Why Japan Succeeded Where India and South Korea Stalled
India’s proposed mobile app regulations and South Korea’s in-app payment law faced delays due to U.S. trade pressure (Apple/Google lobbying) and domestic concerns about scope. Japan’s strategy: narrow focus (just mobile software), clear designation criteria (Apple and Google explicitly named), and phased implementation (guidelines published months before enforcement).
Japan also benefited from EU precedent. By adopting similar frameworks after watching DMA battles unfold, Japan learned what worked (clear definitions, security exceptions) and what triggered pushback (overly broad platform obligations).
The Gaming Industry Impact: 70% of Revenue Affected
Mobile gaming generates 70% of app store revenue in Japan—making it the primary target of both platform commissions and regulatory relief. Major publishers (Square Enix, Bandai Namco, Capcom) can now:
- Offer direct purchases via web stores at 15-30% lower prices (passing commission savings to users)
- Link to external storefronts from within games
- Accept Japan-specific payment methods unavailable on App Store/Google Play
This undermines Apple/Google’s core revenue stream. If even 20% of Japanese gaming revenue shifts to external billing, that’s billions in lost commissions annually.
Will Publishers Actually Switch?
Mixed. Large studios have infrastructure to handle billing, fraud, refunds. Small indie developers lack resources—many will stay on platform billing despite higher costs because operational complexity outweighs savings. The winners: mid-sized studios with enough scale to justify building payment systems but small enough to care about commission margins.
Common Questions
Q: Can I download apps from websites now like Android?
A: On iOS, yes, if third-party marketplaces launch. You’ll need to approve installation, similar to macOS’s Gatekeeper. Apple requires marketplaces to meet security standards (annual audits, malware scanning, developer verification). On Android, sideloading already worked; Japan’s law just removes Google’s friction (warning screens, delayed installations).
Q: Will this make my phone less secure?
A: Potentially. Apple/Google’s walled gardens prevented malware by controlling distribution. Alternative stores introduce risk if they lack robust review processes. Japan’s Act requires “reasonable security measures” but doesn’t specify standards—leaving room for lower-quality marketplaces. Users must vet stores carefully.
Q: Do I have to use alternative app stores?
A: No. App Store and Google Play remain default. Alternative stores are optional—you can ignore them entirely and continue using official platforms.
Q: Will apps get cheaper?
A: Maybe. Developers can pass commission savings to users but aren’t required to. Some will pocket the difference. Competitive pressure might force price cuts—if one developer offers 20% discounts for external billing, others follow or lose customers.
Q: What about apps I already bought?
A: Unaffected. Purchases, subscriptions, and in-app content remain accessible. The law only changes future transactions and distribution methods.
What Happens Next: The Compliance Test
JFTC will monitor whether Apple and Google actually comply or engage in “malicious compliance” (technically meeting requirements while undermining intent). Red flags regulators watch for:
- Approval delays for alternative marketplaces (6+ months to review applications)
- Hidden fees offsetting commission savings (e.g., Apple charging “Core Technology Fee” like in EU)
- Ambiguous security policies that arbitrarily reject competitors
- User friction (excessive warning screens, buried settings for default app changes)
If violations occur, JFTC can fine up to 20% of Apple/Google’s Japanese app store revenue—estimated at $2-3 billion combined annually. That’s $400-600 million potential penalties per violation.
Global Implications: The Domino Effect
Japan is Asia’s first comprehensive mobile platform regulation. South Korea, India, and Australia are watching. If Japan succeeds without Apple/Google threatening market exit (as they did in smaller markets), other countries will copy the playbook.
The pattern: EU leads with DMA → Japan follows with localized version → other democracies adopt similar frameworks → Apple/Google comply globally rather than maintain separate regional versions. Japan’s enforcement by December 2026 determines whether this theory holds.
Bottom Line: Real Change or Creative Compliance?
Japan’s Act forces structural changes Apple and Google resisted for over a decade. Whether those changes materially benefit developers and users depends on execution. If third-party marketplaces face million-euro barriers, complex approval processes, and ambiguous security rejections—the law succeeded on paper but failed in practice.
If, however, viable alternatives emerge (imagine Epic Games Store on iOS in Japan, or regional app stores optimizing for Japanese payment methods), the Act achieved its goal: breaking platform monopolies and increasing competition.
The answer emerges over 6-12 months as developers test boundaries, users adopt (or ignore) alternatives, and regulators enforce (or don’t) against creative compliance. Japan flipped the switch December 18. Now we see if the lights actually turn on.
