Japan’s Mobile Software Competition Act Is Now in Force — What Comes Next?

On 18 December 2025, Japan’s long-awaited Mobile Software Competition Act (widely known as the Smartphone Act) entered into force, marking the country’s most ambitious attempt yet to regulate Apple’s and Google’s gatekeeping positions in the mobile ecosystem. After one and a half years of preparation, the Japan Fair Trade Commission (JFTC) has begun implementation with a focus on dialogue. On paper, the framework looks solid and closely aligned with the EU’s Digital Markets Act; whether it will deliver meaningful change in practice is a more open question, as geopolitical forces and concerns about smartphone security may hamstring the JFTC.

Japan's Mobile Software Competition Act Is Now In Force — What Comes Next?

Simon Vande Walle - 22 december 2025
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A law years in the making — and now finally in force

Japan’s Mobile Software Competition Act, better known as the Smartphone Act, entered into force on 18 December 2025. To mark the occasion, the Japan Fair Trade Commission (JFTC) did something rather unusual for a competition authority: it ran a public countdown to the Act’s entry into force, using the JFTC’s mascot.

That countdown was not just symbolic. It reflected the fact that the Act is the culmination of years of preparatory work. After several years of groundwork, the Act was enacted in June 2024, followed by another one and a half years before the actual entry into force. During that period, the JFTC designated Apple and Google as companies subject to the new regime, issued extensive guidelines, and engaged in repeated rounds of consultation with stakeholders — including the very firms now regulated.

With the entry into force behind us, attention is shifting from design to delivery. What exactly is the Smartphone Act trying to achieve, and what should we realistically expect from it?

(This post is based on my recent academic paper; a link is provided at the end.)

Factual background

The Smartphone Act originated in a government report that diagnosed the Japanese mobile ecosystem as an oligopoly of two operators—Google and Apple—whose influence extends across several interdependent layers. Power in one layer, the government argued, allows them to reinforce or maintain power in the others. The report identified four such layers, which would later become the four categories of services (“software”) regulated under the Act:

Mobile operating systems: Apple’s iOS and Google’s Android together account for virtually the entire market in Japan, with each controlling roughly half.
App stores: Apple’s App Store and Google Play are the only viable app distribution channels on their respective operating systems.
Browsers (on smartphones): Safari and Chrome together account for almost the entire market, reflecting both default settings and technical restrictions imposed by the operating systems.
Search engines (on smartphones): Google’s share exceeds 80% in Japan, far ahead of its closest competitor, Yahoo! Japan (which actually also relies on Google’s search engine, under a commercial agreement).

The report also documented an extensive catalogue of anti-competitive conduct within and across these layers which, in the government’s view, prevented effective competition.

In principle, much of this conduct could have been addressed under the Antimonopoly Act. In practice, however, applying traditional antitrust tools to smartphone ecosystems proved slow, complex, and often inconclusive. Within the government and the JFTC, this led to a growing recognition that ex post enforcement was inadequate and that a new, more targeted rulebook was needed. The rulebook came in the form of the targeted, sector-specific Smartphone Act.

Who is subject to the new rules?

The Smartphone Act applies only to companies that:

provide one of four types of smartphone software (OS, app store, browser, search), and
exceed a quantitative threshold of 40 million monthly users in Japan.

Japan has a population of roughly 123 million, of which around 100 million have a smartphone, so the 40 million benchmark corresponds to roughly 40% of Japan’s smartphone-using population. In relative terms, it is much higher than the 45 million active user benchmark in the EU’s Digital Markets Act, which corresponds to roughly 10% of the EU’s population. Unlike the DMA, however, the Smartphone Act relies solely on user numbers, without additional criteria.

The application of this benchmark proved straightforward. In March 2025, the JFTC designated Apple and Google for mobile operating systems, app stores, and browsers; and Google for mobile search. Notably, neither company challenged its designation, giving the JFTC a smooth runway ahead of the Smartphone Act’s entry into force.

Some U.S. legislators have criticized the Smartphone Act as discriminatory or protectionist, because it solely targets Google and Apple, two U.S. firms (see, e.g., the hearing of the House of Representatives’ Committee on the Judiciary on “Anti-American Antitrust: How Foreign Governments Target U.S. Businesses”). It is true that the companies designated under the Act are both American, but this reflects existing market realities, not regulatory bias. Indeed, in the markets at issue (mobile OS, app stores, browsers and search), the available options for Japanese users and app developers are, in practice, limited to Google and Apple. Competitors have no meaningful foothold so any attempt to open up these markets was bound to be focused on those two companies.

What does the Act actually require?

Substantively, the Smartphone Act will look very familiar to anyone who knows the EU’s Digital Markets Act (DMA). It contains a mix of prohibitions and obligations, including rules that:

prohibit the use of business-user data to compete against those users,
ban obstruction of rival app stores and third-party payment systems,
prohibit anti-steering (out-linking bans),
restrict self-preferencing in mobile search,
require transparency on data access and conditions,
mandate data portability, and
require choice screens for browsers and search engines.

Crucially, these rules apply ex ante: the JFTC does not need to show concrete anticompetitive effects in each individual case. This is a deliberate break with traditional antitrust logic.

Enforcement on paper: strong and credible

On paper, enforcement under the Smartphone Act looks robust. When the Act’s core prohibitions are violated, the JFTC can impose administrative fines (surcharges). The fines are calculated according to a fixed formula: 20% of the turnover derived from the goods or services related to the infringing conduct. Thus, if Apple were found to have hindered other app stores from operating on iOS without valid justification, it would face a surcharge of 20% of the turnover generated by its app store business in Japan. For a violation lasting one year, this could reportedly amount to as much as 100 billion yen (approx. 541 million euros).

The Act also allows for cease-and-desist orders, private damages actions, and injunctive relief. But above all, compliance will be ensured through annual reports and continuous dialogue between the JFTC, the regulated entities (Google and Apple) and third party stakeholders. All of this seems to align closely with the model of responsive regulation: start with dialogue, but retain the ability to escalate.

Why expectations should nevertheless be cautious

Two major constraints are likely to shape how the Smartphone Act is enforced in practice. First, security and safety concerns. Consumers and commentators in Japan are acutely sensitive to concerns about cybersecurity, privacy, youth protection (e.g. the risk that some app stores may distribute apps with pornographic content), and device integrity. These concerns were very present in the legislative debate and explain why the Act goes less far than the DMA. There is no obligation on Apple and Google to allow direct sideloading from websites, and the Act contains broad justifications allowing Apple and Google to defend restrictive measures on security grounds.

These justifications are understandable — but they are also elastic. Much will depend on how strictly the JFTC polices their use.

Second, geopolitics. The Smartphone Act applies, for now, only to two U.S. companies. Its implementation has therefore attracted quiet but persistent attention from Washington. President Trump and an increasing number of U.S. policymakers regard DMA-stye digital regulations as discriminatory and a barrier to trade. Perhaps to avoid the ire of the U.S., Japan has been careful to frame enforcement as balanced, dialogue-based, and respectful of legitimate interests (see, e.g., the JFTC Chair’s interview). In any event, the geopolitical context makes robust enforcement politically sensitive.

So what should we expect?

Japan’s Smartphone Act is a carefully constructed attempt to regulate mobile ecosystems. The Act rests on a clear diagnosis of structural and behavioural constraints in mobile ecosystems; its rules are largely aligned with the Digital Markets Act, and its enforcement toolkit is formidable on paper.

At the same time, Japan’s highly consensual enforcement culture—reinforced by strong safety narratives and geopolitical sensitivities—suggests that the JFTC will proceed with caution. Dialogue and guidance are likely to be the primary enforcement tools. Whether the authority will be willing, in practice, to escalate and impose sanctions in cases of inadequate compliance remains uncertain.

Whether that will be enough to change the behaviour of Apple and Google remains to be seen. In that sense, Japan has become an important test case — not only for its own competition policy, but for the global credibility of DMA-style regulation in major digital markets.