Understanding the Smartphone Competition Law
On December 18, 2025, Japan enacted the Smartphone Software Competition Promotion Act, commonly known as the "Smartphone Competition Law." This groundbreaking legislation aims to address market monopolization by tech giants like Apple and Google, creating a more competitive and fair marketplace for mobile applications.
For years, the distribution and monetization of smartphone apps have been dominated by Apple and Google. Developers faced high commission fees with limited alternatives, while users had restricted choices in how they interacted with mobile services. The new law seeks to fundamentally reshape this landscape.
Three Major Changes Coming to Google Play
1. External Website Redirects from Within Apps
The most significant change allows app developers to redirect users from within their apps to external websites for purchases. Previously, developers were largely prohibited from circumventing in-app billing systems to promote direct payments on their own websites.
Google has introduced a new "participation program" that provides registered developers with implementation APIs. However, using this program will incur fees. While Google maintains that "fees are permissible under Fair Trade Commission rules and guidelines," specific commission rates were scheduled to be announced on the day of implementation.
This change is expected to enable developers to accept payments with lower commission rates than the traditional Google Play billing system. For example, when purchasing items in a gaming app, developers can now guide users to their official website to complete the transaction there.
2. Browser and Search Engine "Choice Screen"
Following iOS, Android devices will now feature a "choice screen" for browsers and search engines. During initial smartphone setup, users will be presented with a selection screen to choose their default search engine and browser.
Five options each for browsers and search engines will be displayed in random order. This allows users to consciously choose alternatives to Google Chrome and Google Search. This feature has been rolling out gradually since December 2 for smartphones running Android 15 or later.
3. Expanded Third-Party Payment Services for Gaming Apps
Game developers will gain the ability to offer third-party payment services for in-app content purchases without requiring users to leave the app.
Since 2022, this functionality has been available in Japan for non-gaming apps. With the enforcement of the Smartphone Competition Law, the scope expands to include gaming applications. This enables users to select from multiple payment methods without exiting the app.
Benefits for Users and Developers
For Users
- Increased Choice: Freedom to select from various browsers, search engines, and payment methods
- Potential Price Reductions: If developer commission burdens decrease, app and content prices may fall
- Enhanced Convenience: Third-party payment integration allows users to choose familiar payment methods
For Developers
- Reduced Commissions: Possibility to accept payments at lower commission rates than Google Play's billing system
- Improved Profitability: Decreased commission burden allows for greater revenue retention
- Direct Customer Relationships: Direct website payments enable better customer data management
Security Concerns to Consider
The opening of third-party app stores raises legitimate security concerns. Apps that were previously subject to Google Play's strict review process may now be installed from stores with different standards, potentially increasing risks of malware and fraudulent applications.
Users will need to exercise greater caution in selecting trustworthy app stores and payment services, requiring heightened security awareness compared to the past.
Looking Ahead
The concrete impacts of the Smartphone Competition Law are expected to become clear over the next several months to a year. Key areas of focus include:
- Google's commission rates for external redirects
- Adoption rates of third-party payment services
- Occurrence of security incidents
- Fluctuations in app and content pricing
Internationally, similar regulations have been implemented, including South Korea's "Anti-Google Law" and the EU's Digital Markets Act (DMA). Japan's Smartphone Competition Law is part of this global trend, and further regulatory enhancements or adjustments may occur in the future.
Conclusion
The enforcement of the Smartphone Competition Law marks a major turning point for Japan's smartphone market. While users gain more choices and developers access expanded revenue opportunities, addressing security risks becomes increasingly important.
Whether this legislation truly creates a fair competitive environment and delivers benefits to both users and developers remains to be seen. Close monitoring of future developments will be essential to assess its long-term impact on the mobile ecosystem.
Reactions in Japan
Finally, the monopoly of Google and Apple is breaking down with the new smartphone law. As a developer, I'd be happy if commissions decrease, but it really depends on the specific rates. Half hopeful, half anxious.
Now we get a choice screen for browsers and search engines, but honestly I don't know what to choose. I end up thinking Chrome and Google Search are fine as they are.
I'm worried about security with more third-party app stores. There are already so many scam apps, what will happen if stores with lax reviews emerge?
I'm excited hearing that app prices might go down! If commission fees decrease, I hope users will see some benefits too.
Google is still charging fees for external redirects, so won't nothing really change? What's the point of the regulation?
I'm an indie app developer. Finally, it feels like we have a level playing field to compete with big companies. Being able to charge directly on my own site is huge.
More choices are good, but I feel like it'll just confuse people who aren't tech-savvy. What about elderly people?
I'd be happy if game microtransactions become cheaper. The current 30% commission is too high.
Similar laws exist in Korea and the EU. Japan is late to the party, but better late than never.
Being redirected from within an app to an external site - how is that for user experience? Seems like it might become more of a hassle.
It's a choice between security risks and convenience. I might feel more secure with the current system that stays within Google Play.
If the Fair Trade Commission properly monitors this, it could work, but I feel like big companies will just find loopholes anyway.
I learned about Brave and DuckDuckGo for the first time through the choice screen. Maybe I'll give them a try.
Is this ultimately for consumers or developers? Hope there are benefits for both.
Working at an app development company. We're in wait-and-see mode internally, but depending on external redirect fees, we might significantly change our strategy.
Working in IT, but can't predict this law's impact yet. Think we should wait and see for several months to a year.
For subscription apps, if we can contract directly on their site, will cancellation become easier too? That would be nice.
Regulation is necessary, but too much could hinder innovation. Balance is key.
I'm worried about personal information management. Isn't it scary to be redirected to an external site and enter credit card info there?
Wonder how Apple will respond. Seems like they might take a stricter approach than Google, which concerns me as an iPhone user.
Japan has finally enacted legislation to counter Big Tech monopolies. We have similar discussions in the US, but nothing has materialized yet. I hope Japan's move becomes a global standard.
This is similar to the EU's Digital Markets Act. It's already enforced in Europe and has increased consumer choice. I hope it works well in Japan too.
Korea enacted the Anti-Google Law in 2021. Some apps now offer third-party payments, but Google's commissions haven't changed much. Japan might face the same challenges.
App store monopolies are also an issue in Brazil. If Japan's law succeeds, similar regulations might be introduced in my country. Watching closely.
I understand the security concerns. More third-party app stores increase malware risks. Regulators need to monitor this carefully.
As a German app developer, I welcome this move. Google and Apple's 30% commission has been problematic for years. I hope Japan's success influences other countries.
As a consumer, more freedom of choice is good. However, it might be difficult to determine which payment methods are safe. Education is also needed.
We have similar discussions in India. Fair competition is especially important in countries with rapidly growing mobile markets. I want to learn from Japan's case.
In Canada, we're still in the discussion phase about Big Tech regulation. If Japan and the EU succeed, Canada might also move forward with legislation.
Poland's startup industry has been calling for this type of regulation for years. Small developers need an environment where they can compete with big companies.
In Australia, Google's market dominance is also a concern. I'm very interested to see what results Japan's law brings.
As an Italian consumer, the possibility of lower prices is attractive. But I doubt developers will actually pass their savings on to users.
Sweden is highly digitalized, but app store monopolies haven't been sufficiently discussed. Japan's initiative is a good reference.
Taiwan's tech industry is also paying attention. With Japan taking the lead in Asia, other countries might follow.
The digital economy is rapidly growing in the UAE. A fair competitive environment is essential for long-term innovation.
Russia also has regulations on foreign Big Tech companies. Japan's approach is more market-oriented and interesting.
Ireland is Europe's tech hub with many big company headquarters. The whole industry is watching how Japan's regulations will impact things.
In developing countries like Egypt, affordable apps are crucial. If commissions decrease, more people can access digital services.
In the Netherlands, we're very concerned about data privacy. I'm curious how personal information management will change with third-party payment introduction.
In Mexico, Big Tech's influence is growing year by year. With regulations like Japan's, local developers might have more opportunities.