Japan's Digital Platform Regulation — The Transparency Act, Smartphone Software Act, and Information Distribution Platform Act Define New Rules

What Is Happening

Japan's digital platform regulation is advancing through three laws simultaneously. The Transparency Act for Digital Platforms (特定デジタルプラットフォームの透明性及び公正性の向上に関する法律), the Act on Promotion of Competition for Smartphone Software (スマホソフトウェア競争促進法), and the Act on Measures Against Information Distribution Platforms (情報流通プラットフォーム対処法). Each falls under a different regulatory authority — the Ministry of Economy, Trade and Industry (METI; 経済産業省), the Japan Fair Trade Commission (JFTC; 公正取引委員会), and the Ministry of Internal Affairs and Communications (MIC; 総務省) — and each imposes distinct obligations on platform operators from a different angle.

The earliest to take effect was the Transparency Act. Since its enforcement in 2021, METI has designated Amazon, Rakuten, Yahoo! Shopping, Apple, Google, Meta, and LINE Yahoo as "specified digital platform providers." Designated operators are required to submit annual self-assessment reports and to disclose the principal parameters of algorithms that influence search rankings and recommendations. However, penalties for violations are capped at one million yen — a level so low that the effectiveness of enforcement has been widely questioned.

Two additional laws came into force in 2025. The Act on Measures Against Information Distribution Platforms, enforced in April under MIC's jurisdiction, designated nine companies including Google, Meta, X, TikTok, and LINE Yahoo. It requires platforms to notify complainants of the outcome within one week of receiving a request to remove rights-infringing content such as defamation. The Smartphone Software Act, fully enforced in December, saw the JFTC designate Apple and Google, mandating the opening of third-party app stores, the permitting of external payment systems, and the prohibition of restrictions on browser engines. Surcharges are set at 20% of domestic revenue — or 30% for repeat offenses — orders of magnitude greater than the Transparency Act's penalties.

The markets governed by these three laws are vast. Internet advertising expenditure reached 3.6517 trillion yen in 2024, accounting for 47.6% of total advertising spending. Social media users number 97 million, representing 78.6% of the population. Japan's e-commerce market stands at approximately 17.7 trillion yen, with Amazon.co.jp alone commanding roughly 49.6% of the domestic market. Hundreds of millions of transactions and information encounters rest upon this foundation.

Background and Context

Japan's platform regulation has followed the European Union's trajectory with a lag of several years. The EU enacted the Digital Services Act (DSA) and the Digital Markets Act (DMA) in 2022 and began full-scale enforcement in 2024. The DMA obliges gatekeeper companies to open their app stores and ensure data portability, imposing fines of up to 10% of global revenue (20% for repeat offenses). The DSA requires large platforms to assess and mitigate systemic risks, with fines of up to 6% of global revenue. In December 2025, X Corp. (formerly Twitter) was fined 120 million euros. The EU system is a mandatory regulatory model, with the European Commission serving as the centralized enforcement authority.

Japan's system adopts a different approach — a "co-regulatory model." Under the Transparency Act, operators report their voluntary improvement efforts through annual reports, which METI then evaluates. Penalties are designed to be restrained, and dialogue-driven improvement takes precedence over direct administrative orders. This approach has the advantage of reducing regulatory costs and respecting operators' autonomy, but it carries the structural weakness of having few effective instruments when improvement stalls.

Another critical difference lies in the comprehensiveness of each regime. The EU's DSA/DMA explicitly codify data portability rights, guaranteeing users the right to transfer their data to other services. Large platforms are also required to conduct risk assessments and annual audits for systemic risks — including the spread of disinformation, electoral interference, and harmful content targeting minors. Japan's three laws contain no comparable provisions. Regarding algorithm disclosure, the Transparency Act requires only the disclosure of "principal parameters," without mandating explanations of why specific content is displayed or recommended to individual users.

On the other hand, the Smartphone Software Act's surcharge level merits close attention. At 20% of domestic revenue, it exceeds the EU DMA's 10%. Never before in Japan's competition law has such a high surcharge rate been established. The fact that the JFTC — with its enforcement expertise under the Antimonopoly Act (独占禁止法) — serves as the supervising authority marks a clear departure from the Transparency Act's framework. Although all three laws belong to the domain of "platform regulation," they exhibit a wide spectrum in their underlying regulatory philosophies.

Reading the Structure / Seeds for Social Vision

When the three laws are examined side by side, the structural characteristics of Japan's platform regulation come into focus. The first is the siloed institutional design. METI (Transparency Act), MIC (Information Distribution Platform Act), and the JFTC (Smartphone Software Act) each exercise independent jurisdiction, with distinct regulatory targets and objectives. In practice, however, platform operators run e-commerce, advertising, content distribution, and app stores as integrated businesses. Google, for instance, is a designated operator under all three laws — the Transparency Act for e-commerce, the Information Distribution Platform Act for information flows, and the Smartphone Software Act for its app store. What users perceive as a single platform is regulated by three separate laws from three different angles — a structure that raises challenges for regulatory coherence and efficiency.

The second feature is the asymmetry in sanctions. Between the Transparency Act's maximum fine of one million yen and the Smartphone Software Act's surcharge of 20% of domestic revenue, the gap spans several thousand- to several ten thousand-fold. This asymmetry reflects not only the difference in enactment periods (2020 and 2024) but also the differing institutional characters of the regulatory authorities. METI prioritizes the balance between industrial promotion and regulation, while the JFTC's primary mandate is maintaining competitive order. That regulatory philosophies diverge so sharply within the same field of "platform regulation" renders the overall institutional message ambiguous. For operators, it is difficult to discern which obligations under which law should take priority.

The third feature concerns both the limitations and potential of the self-reporting model. The "self-assessment report" framework adopted by the Transparency Act is frequently criticized as lenient regulation. Viewed from another angle, however, it is a design that requires operators to internalize the regulatory regime. Rather than compelling minimum compliance through the threat of penalties, it asks operators to structurally reflect on their own operations and sustain a cycle of improvement — a principle that, in theory, could yield more durable effects than punitive regulation alone. The problem is that the preconditions for this principle to function — sufficient information disclosure, effective monitoring, and escalation mechanisms when improvement does not materialize — have not been adequately established.

From the perspective of social vision, the institutional space outlined by these three laws contains one conspicuous absence: the position of the user. The Transparency Act focuses on transparency in business-to-business transactions, the Information Distribution Platform Act on responses to rights-infringing content, and the Smartphone Software Act on competitive conditions in the app market. Yet none of them directly addresses how platform users manage their own data, how they engage with algorithmic recommendations and content curation, or how they move between platforms — that is, how citizens' autonomy in the digital sphere is to be institutionally guaranteed. The EU's codification of data portability and systemic risk assessment obligations was precisely one response to this question.

Remaining Questions

Even with all three laws now in place, the full picture of Japan's platform regulation remains incomplete. Will the siloed jurisdictional structure move toward integration, or will it be maintained through the accumulation of individual statutes? Will the Transparency Act's self-reporting model build a track record that establishes its effectiveness, or will it devolve into a ritual of pro forma reporting?

When the Smartphone Software Act's 20% surcharge is actually imposed, Japan's platform regulation will enter a new phase. Yet a law with no enforcement record is, for operators, less a binding norm than one risk factor among many. Compared with the EU's imposition of a 120-million-euro fine on X Corp. within a single year of DSA/DMA enforcement, the distance between statutory text and enforcement practice becomes visible.

Ninety-seven million social media users and a 17.7-trillion-yen e-commerce market. There is no single correct answer to the question of what regulatory framework is appropriate for a digital economy of this scale. The stringency of the EU model is not necessarily always optimal. However, the fact that issues such as users' data sovereignty and algorithmic accountability remain outside the scope of these laws reflects less a regulatory gap than an absence of societal debate. Now that all three laws are in motion, it is time for the question beyond the statutory text — "What kind of space should the digital sphere be designed to be?" — to be raised not only by the architects of these institutions but also by the citizens who inhabit that space.

References

Act on Improving Transparency and Fairness of Digital Platforms (特定デジタルプラットフォームの透明性及び公正性の向上に関する法律)

Ministry of Economy, Trade and Industry. Ministry of Economy, Trade and Industry

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Act on Promotion of Competition for Smartphone Software (スマートフォンにおいて利用される特定ソフトウェアに係る競争の促進に関する法律)

Japan Fair Trade Commission. Japan Fair Trade Commission

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Act on Measures Against Information Distribution Platforms (情報流通プラットフォーム対処法)

Ministry of Internal Affairs and Communications. Ministry of Internal Affairs and Communications

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Digital Services Act (DSA) & Digital Markets Act (DMA)

European Commission. European Commission

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