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Editorial: As Japan set to regulate IT giants, more transparency needed in digital society

Japan is set to introduce full-scale regulations on information technology (IT) giants like U.S.-based Google. The move comes after the Japanese Diet passed a bill to amend the Act on the Protection of Personal Information and approved a separate bill to create a new law to ensure transparency in online transactions.

The revised personal information protection law boosts one's right to demand that service providers stop using data accumulated through search engines and social media. It also demands that companies obtain permission before using cookies, which keep track of a person's browsing history, if used in a way that can identify individuals.

Meanwhile, the new transparency law aims to prevent unfair business practices in which major online shopping companies force shops that sell their goods and services on these giants' sites to enter into disadvantageous contracts. It also requires IT giants to notify online tenants in advance when changing the terms of their contracts. Some online tenants have pointed out that the standard for search rankings is unclear, and under the new law, major companies are obligated to disclose their ranking methods when searching for products that affect tenants' sales

Big tech companies must report their current state of work in tackling such problems to the Japanese government once a year. Malicious cases that constitute a violation of the antimonopoly law are apparently subject to crackdowns by the Japan Fair Trade Commission.

While providing free and convenient services for many users, tech giants such as Google, Apple, Facebook and Amazon (GAFA) boast an overwhelming share of the online market. The firms have become indispensable for individuals and other companies, and are making huge profits from businesses, including through advertising that connects the two.

But their oligopoly over users' data and powerful influence on the market has been seen as problematic in recent years, and regulatory movements have spread across the globe. The European Union was quick to introduce strict regulations, and Japan followed suit.

However, the effectiveness of the regulation remains questionable. In this digital world with speedy technological advancements, proving law violations is not easy. Borders between other countries also stand in the way of applying regulations on GAFA.

As people are staying at home amid the coronavirus pandemic, more individuals are using the internet, and IT giants have strengthened their presence. Furthermore, the Japanese government is using technology and data provided by such companies to analyze the turnout of people in downtown areas, as well as to develop a smartphone app that alerts users who may have been in close proximity to those infected with the coronavirus.

GAFA and other such businesses must realize their responsibility of playing an important role as infrastructure in a digital society. They should make efforts to secure transparency of their transactions and use of personal information. Without that, we cannot hope for a robust digital society.

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