The Fair Trade Commission will soon initiate a large-scale investigation to ascertain the state of information technology giants' business practices, FTC sources have said.
The antimonopoly watchdog is expected to start by investigating online sales, in which unfair practices are believed to be common, as well as sales of smartphone apps. The commission hopes to announce the result of the investigation in April, according to the sources.
Google, Apple, Facebook and Amazon -- collectively known as GAFA -- dominate the market and could be forcing unfair business practices on their retailers and app providers.
The investigation will be carried out chiefly through questionnaires to retailers and hearings with them. If necessary, the FTC will invoke the Antimonopoly Law's Article 40, which stipulates rights to compulsory investigation to uncover the details of business practices. The commission will soon make an official announcement that they will conduct the investigation.
Regarding online sales, there have been mounting claims from retailers using IT giants as marketplaces that terms and conditions for usage were unilaterally changed and that merchandise sold directly by IT giants gets favorable treatment. The FTC is expected to examine such business practices.
The commission will also study business practices for sales of mobile apps in app stores used by smartphone users. Google Play and Apple's App Store are the two largest distribution channels for smartphone apps, and companies that want to provide mobile apps to users can essentially do so only through those two stores.
Claims have been made that app sales have been unilaterally terminated or payments for app sales have been limited to the two stores' payment systems. The FTC will investigate Google and Apple regarding those claims.
After announcing the results of the investigation in April, the commission will then investigate other matters. The government will draw on the results of the investigations when it devises policies to toughen regulations on IT giants, and when organizing a new monitoring body of experts.
Policies on IT giants have become increasingly strict in Japan as well as in Europe. Regarding online sales in Europe, Germany's Federal Cartel Office launched an investigation into Amazon in November, saying the company is exploiting its market dominance with retailers using it as a marketplace.
The European Union is also considering coming up with regulations to stop unfair business practices by IT giants.
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