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Economy

Japan to step up oversight of foreign tech giants

Tokyo addresses fears of data hoarding by likes of Amazon, Google and Alibaba

U.S. platform operators will be closely watched in Japan.   © Reuters

TOKYO -- The Japanese government will keep a closer eye on foreign companies that work with big data, aiming to promote healthy competition and ensure that consumers and small businesses are not harmed by excessive concentration of information.

Plans are to set up an oversight body as early as 2020, based on recommendations in an expert panel's draft report. The watchdog will look at the practices of platform operators like Amazon.com and Google, identify problems, and recommend legislative and other solutions. The government aims to draw up a framework for the new body by next summer.

Platform operators use big data and artificial intelligence to power search engines, e-commerce and other services. These benefit many consumers and companies but also raise competitive concerns, since smaller businesses must take such steps as slashing prices to keep up.

Before the new watchdog is set up, the Japan Fair Trade Commission will conduct a survey of the information technology industry as early as January, looking for illegal business practices or contracts. If companies affected by such issues refuse to cooperate over confidentiality obligations, the commission will consider invoking the anti-monopoly law, which empowers it to make an entire industry submit requested information.

The expert panel's report stresses taking a hard line against the concentration of data in few hands. The commission will start taking data consolidation into account in its antitrust reviews of mergers and acquisitions.

The government must concern itself with not only American tech giants, but also Chinese players like Alibaba Group Holding, warns the report, which notes that the closed nature of China's massive data market has fostered the growth of powerful platform operators.

The report calls for an international conversation on whether these businesses are competing fairly as they enter other countries. The increased oversight also aims to curb alleged data collection by Chinese tech companies at Beijing's behest.

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