Enhance transparency to stem ill effects of IT giants’ dominance

The Yomiuri ShimbunIT companies of the United States and elsewhere quickly become enormous by taking advantage of their massive amounts of digital data. It is a matter of course that a sense of wariness also grows.

To prevent the ill effects of their market dominance from spreading, the government needs to quickly implement effective regulations.

A governmental panel of experts tasked with considering regulations on IT giants — known as digital platform operators — heard opinions from Google Inc. and Apple Inc., both of the United States. Facebook, Inc. only submitted an opinion paper, and, Inc. did not attend the interview.

Google and others expressed their concerns that technological innovation could be impeded if excessive restrictions are placed on them. When the panel pointed out that the IT market is in a state of oligopoly, they reportedly refuted that by saying they are exposed to competition.

The panel will compile a final report shortly. The panel is expected to call on the government to make it obligatory for these digital platform operators to disclose such important information as the terms of the contracts with their trading partners.

The European Union is moving forward with the drafting of regulations to be imposed on IT giants. Japan’s government should work out the details of its regulations by using as a reference the regulations being drawn up by the EU.

Digital platform operators have produced innovative technologies, but as they bolstered their market dominance, there have been increasing cases of their buying out newly growing enterprises.

As things stand now, this could result in market competition being restricted, making it likely that the young buds of new technologies and services will be nipped.

Don’t limit innovation

The Japan Association of Corporate Executives has compiled an opinion paper saying “digital platform operators are on the threshold of entering a cycle of reproducing and restrengthening their overwhelming competitive advantage,” thus supporting the regulations. This is reasonable thinking.

It can be deemed an appropriate judgment for the government to impose certain restrictions on IT giants while taking care not to impede the private sector’s originality and ingenuity.

There are many voices saying that the contracts these digital platform operators have inked with their trading partners are unfair. According to a survey taken by the Economy, Trade and Industry Ministry, 86 percent of the business operators dealing with IT giants said they have been put at a disadvantage due to the IT giants’ unilateral alterations of their agreements and the like.

In Germany, the Federal Cartel Office has launched an investigation into Amazon. The agency said there is a suspicion that Amazon is hurting retailers in that country trying to sell products through its website.

Even when these digital platform operators assert they are conducting fair dealing, their claims lack persuasiveness. The panel members also voiced criticism that “it is problematic in that the present state of affairs cannot be inspected.”

There are also not a few consumers who feel uneasy about such personal information as their purchase records and the history of their past online searches being collected and made use of.

How should such privacy-related data be protected? The government should consider mapping out relevant rules.

(From The Yomiuri Shimbun, Dec. 5, 2018)Speech


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