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Japan panel to call for creating IT watchdog

An expert panel will call for the government to set up a team of specialists to monitor the business practices of tech giants in its interim report to be released early next month.


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Updated: October 29, 2018

According to the draft of the interim report on measures to step up regulations on tech giants such as Google Inc. and Amazon.com Inc., the expert panel will also urge the government to consider obligating these firms to disclose important information, such as the terms and conditions of deals with their business partners.

The government will make earnest efforts to tighten regulations on digital giants as similar moves have already been seen in Europe.

The expert panel will release its interim report in early November before compiling the final version by the end of this year. Based on its proposals, the government will examine concrete measures from next year.

In the draft of the interim report, the expert panel outlines the following aspects of tech giants:

■ Providers of platforms essential for society and the economy.

■ Developers and administrators of markets, but unlike stock exchanges among other examples, are not subject to specific regulations.

■ Such markets have a high degree of manipulation and are highly untransparent.

Based on these views, the draft expresses concern that tech giants could force unfair transactions on small and midsize companies by taking advantage of such unclarity. It also points out that because these service providers have amassed personal data such as web search and purchase histories, the companies’ data handling “could infringe on the interests of users.”

The draft emphasizes that it is necessary to promote transparency of tech giants’ business transactions to eliminate adverse oligopolistic effects. Furthermore, the report indicates a possibility of obligating tech giants to clarify and disclose important sections of their contract terms and conditions with business partners and how they handle personal information. The draft also proposes enforcing investigation into tech giants by the Fair Trade Commission by its compulsory authority stipulated in Article 40 of the Antimonopoly Law, and calls for the creation of a monitoring team comprising experts.

In response to the proposals, the government will discuss setting up a team of experts tasked with monitoring tech giants. The team will comprise experts in such fields as information technology, data analysis and economics. It will research and analyze market practices by tech giants on a continuous basis.

If the team discovers a transaction it deems to be a breach of regulations, it will report the case to the FTC and other related authorities to help them take action. The FTC will launch a large-scale survey on tech giants’ business deals early next year at the earliest.



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The Japan News
About the Author: The Japan News is published by The Yomiuri Shimbun, which boasts the largest circulation in the world.

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