Photo/IllutrationInformation technology giants such as Google, Amazon and Facebook derive their power from data they have amassed through their digital platforms. (Asahi Shimbun file photo)

Japan plans to impose its first regulations on the world’s biggest information technology companies over concerns that their monopolistic hold on personal information is hampering fair competition and promoting shady uses of the data.

The proposal was included in an interim report on issues related to dominant digital platforms released on Nov. 5 by a study panel formed by the Ministry of Economy, Trade and Industry, the Fair Trade Commission and other entities.

The panel has been examining complaints about Google, Apple, Facebook and Amazon, collectively known as GAFA, and other major IT companies since July.

It is expected to compile a final draft by the year-end and start weighing regulations in January.

The European Union took moves against GAFA earlier this year over its business practices.

The Japanese government has yet to impose rules against GAFA and other big players, but their oligopoly of the market has greatly expanded by concentrating personal data of Internet users gleaned from the increasing use of searches and online shopping.

Many experts have said it is unclear how those IT companies are treating the enormous amount of collected data.

They have also expressed concerns that the behemoth holders of digital platforms have forced client companies to compete in an unfair environment and accept raw deals.

One regulation under consideration for the IT giants is requiring them to disclose terms and conditions and other information related to their contracts with client companies.

The government will also consider establishing a watchdog organization to monitor whether the holders of digital platforms are monopolizing data and impeding fair competition in the market.

In addition, if an IT giant is planning a corporate buyout, the Fair Trade Commission may consider the size of the data concentration held by the targeted company before giving approval for the deal.

According to an industry ministry survey in October on about 2,000 companies, more than half of them were “dissatisfied” with the way IT giants operated their digital platforms, made contracts and conducted business practices.

Coupled with the ratio of respondents calling for “improvements” on the part of the digital platform holders, more than 90 percent of the companies surveyed were dissatisfied with them.

Among the many grievances listed were: “It is difficult to hold individual negotiations” and “We were placed at a disadvantage after the terms were changed unilaterally.”

In April, the EU’s European Commission released regulation proposals, including having digital companies clarify how they display goods and products on search sites, such as the prominence of items up for sale.

Another proposal is to set up a system aimed at resolving disputes with retailers.

In July, the EU slapped a fine of 4.34 billion euros (about 570 billion yen or $5.4 billion) against Google for using its monopolistic market position to force manufacturers of mobile phones to install its app.

Britain in late October announced the introduction of a digital service tax against Apple and other IT giants of 2 percent of all revenues derived from users in Britain.

The United States is moving to enact a federal law to protect personal information. Senior officials of Google and Twitter were summoned to testify in hearings held by the U.S. Congress.

(This article was compiled from reports by Akihiro Nishiyama, Kenichiro Shino and Fumiko Kuribayashi.)