The Japan Fair Trade Commission (JFTC) has investigated Apple in accordance with the provisions of the Antimonopoly Act.
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Apple has been suspected of restricting business activities, such as selling digital contents, etc., of enterprises that distribute applications based on App Store Review Guidelines as Apple operates App Store, where the developers distribute apps for iPhone.
During the JFTC’s investigation, Apple proposed to take measures such as revising the Guideline related to the alleged conduct above.
As a result of the JFTC’s review on this proposal, the JFTC recognized it would eliminate the abovementioned suspicion and decided to close the investigation on this case after the JFTC confirms the measure has been taken.
(Note 1) Suspected violation of the provisions of Article 3 (private monopolization) and Article 19 (paragraph 12 [Trading on Restrictive Terms] of the Designation of Unfair Trade Practices, etc.) of the Antimonopoly Ac
(Note 2) Digital contents such as music, e-books, videos, etc., paid additional functions of apps, and subscription services such as unlimited music streaming service, etc.
The volume of smartphone shipments in Japan exceeds 30 million per year and iPhone supplied by Apple Japan G. K. have 46.5 % market share.
App Store is the only place where iPhone users are able to download native apps. Apple has published the Guideline with which apps in the App Store are to comply and reviews these apps based on the guideline. In the process of the review, when Apple finds that the app does not comply with the Guideline, the app may not be allowed to be distributed via App Store.
Apple, based on the Guideline, requires developers to use the means of payment which Apple specifies (IAP) for sales of digital contents, etc. within the apps, and charge developers with fee, amounts to 15 or 30 percent of sales through IAP.
Apple charges developers with 15 percent of 1) sales in case of subscription over a year and 2) total annual App Store proceeds sales net of Apple’s commission and certain taxes and adjustments less than 1 million dollars.
The Guideline stipulates that developers are required to use IAP for sales of digital contents, etc., and prohibits from including external links or buttons within the app to induce consumers into purchase other than using IAP.
In the situation described above, prohibiting developers from including an in app link could be a problem under the Antimonopoly Act because it gives concerns on developers’ sales channel using means of payment other than IAP, such as insufficient functions and abandon of introducing them.
Apple reported to the JFTC to work on clarifying the Guideline and improving the transparency of app review in order to improve the predictability of developers and report the status of them to the JFTC once a year for three years.
The JFTC recognized that the measure proposed by Apple would eliminate the suspected violation of the Antimonopoly Act and decided to close the investigation on this case after confirming that the measure has been actually taken. ■
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