Japan’s antitrust watchdog said Thursday it has compiled draft guidelines for tighter regulation of technology giants in order to strengthen protection of customer data, as it aims to introduce the first such rules as early as October.
The Fair Trade Commission said the guidelines are designed to address criticism against major tech companies such as Amazon.com Inc., Apple Inc., Facebook Inc. and Google LLC for obtaining personal data by making use of their “superior bargaining position.”
These companies are facing growing criticism that they are discouraging new companies from entering the market by monopolizing customer data through their platforms to bolster their competitive positions.
The new guidelines will be applied to companies providing online shopping, social media, search engines and video, music and app distribution, the commission said.
The regulators will for the first time apply the antimonopoly law to business practices between a company and customers to protect consumer privacy.
The commission stipulates tech giants are in “a superior bargaining position” when customers have no choice but to provide their data to use the services.
Obtaining personal data such as location and purchase records without giving fully notifying consumers of the purpose of use will be regarded as an abuse of a superior bargaining position.
Using such information without proper data management will also be deemed as an unfair trade practice, the watchdog said.
The government aims to enact a new law next year to ensure transparency in business transactions with major tech companies.
Other countries including the United States are also stepping up scrutiny over tech giants to assess whether they are engaging in practices that could undermine fair competition, stifle innovation or harm consumers.