TOKYO -- Japan's ruling party is crafting legislation to protect consumers and smaller businesses from technology companies that operate dominant platforms, such as Amazon.com, Facebook and Rakuten, Nikkei learned Wednesday.
The Liberal Democratic Party will present its proposal to Prime Minister Shinzo Abe next week, with plans to submit the bill to parliament next year. The goal is to promote a fair and transparent market by setting rules centering on disclosure requirements rather than imposing broad, restrictive regulations.
The plan forms the core of proposals by the party's economic growth strategy division, headed by policy chief Fumio Kishida. The proposals will be finalized Thursday and submitted to Prime Minister Shinzo Abe as early as next week, and will likely be incorporated into the government's annual Basic Policy on Economic and Fiscal Management due out in June.
Smaller businesses and startups that work with Big Tech platforms, such as in e-commerce, often complain that an uneven power dynamic leads to high fees and other adverse terms. The new law would require the platforms to clearly outline contract terms and usage rules, and to provide advance notice before changing them.
Platforms would be banned from limiting clients' use of their own data, so those companies can track sales and other relevant information. The law would also require platforms to disclose algorithms that determine which websites or products show in their search results.
The Japan Fair Trade Commission, the country's consumer watchdog, said in April that it was planning to put together regulatory guidelines by summer, explaining views on what constitutes abuse of dominance and providing examples.
This will likely cover cases as online retailers using data on purchases in targeted advertising against consumers' wishes, as well as intentionally long and jargon-filled data privacy policies designed to discourage users from reading them.
Three-quarters of consumers responding to a survey on information technology services expressed concern over how personal data is collected and used, the commission said. Nearly three-quarters of businesses in the survey said they had experienced unilateral changes to agreements with Amazon, and 93% reporting the same problem with online marketplace Rakuten Ichiba, run by Japanese e-commerce group Rakuten.