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Japan targets IT giants with rules on use of online purchase and browsing history

TOKYO -- The use of consumers' online purchase and browsing history without gaining their consent, among other acts, will be subject to regulations against information technology giants, according to an outline of draft regulations under consideration by the Japan Fair Trade Commission (JFTC), it has been learned.

The draft regulations are aimed at preventing IT giants from collecting and using personal information in an unjust manner by applying the anti-monopoly law to business-to-consumer relations for the first time.

Specifically, the use of personal information by IT giants, dubbed as "platformers" in Japan, without individuals' consent will fall under "abuse of a superior bargaining position" prohibited under the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade. Violators will be subject to a cease and desist order and a surcharge payment order, according to the draft.

U.S. IT giants such as Google and Apple, as well as other platformers, obtain customer data in exchange for the provision of services and use such data in other businesses, thereby expanding their business spheres. Backed by their enormous market shares, some platformers coerce clients to comply with changes in terms of use and leak information they have collected. The JFTC, therefore, decided that it would be insufficient just to regulate them by applying the anti-monopoly law in a conventional manner and administering the Act on the Protection of Personal Information.

Under the draft regulations, all information related to individual consumers will be subject to regulations. Such information includes their names, addresses, history of product purchases and web-browsing, and location information.

The proposed regulations also specify cases that could constitute violations of the anti-monopoly law. Those cases include: acquiring personal information without informing customers of the purpose of their use; obtaining information against customers' will beyond the extent necessary for provision of services; acquiring and using information without taking security control measures; and making terms of use for personal information too difficult for information providers to understand.

The draft regulations are premised on a situation where a small number of IT giants control the market and customers have little choice for alternative services. The JFTC plans to release the proposed regulations as early as August and aims to start implementing them by the end of the year.

(Japanese original by Takashi Narumi, Business News Department)

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