Japanese Legislators Plan to Mandate Alternatives to Proprietary Payment Systems

Legislators in Japan are working on a new bill that could require major app store operators, including Google and Apple, to provide alternatives to their proprietary payment systems. If the bill is approved, it would mean that these companies would no longer be able to exclusively use their own payment systems. Although the plans are still in the early stages, a bill could be introduced to the Japanese parliament as early as 2024. This move comes as other countries, such as the UK, have also pushed for similar legislation to open up payment systems.

The Power of Alternatives

The so-called “app tax,” which refers to the fees charged by app stores on premium downloads and in-app purchases, has been a contentious issue for developers. Google Play and the iOS App Store typically take a 30% cut, which has sparked legal battles and lawsuits. In fact, developer Epic Games recently filed a highly-publicized lawsuit against Apple over this issue. While the legal battle favored Apple, it did result in rulings that allow game developers to accept payments outside of the app store ecosystem.

Japan’s Unique Position

Japan has a special interest in legislating payment alternatives due to the prominence of in-app purchases (IAPs) in the country’s gaming industry. Japan is known for the purchase-focused gacha genre, and many developers heavily rely on IAPs for revenue. As a result, Japanese legislators are taking serious measures to address this issue. Some media outlets have even referred to these proposed regulations as a “regulation kaiju,” drawing a comparison to giant monsters in Japanese films like Godzilla.

Companies Taking Action

Many companies, including Finnish developer Supercell, have already found ways to circumvent the payment tax imposed by app stores. They have started opening their own dedicated web stores for in-app purchases, enabling them to bypass the fees associated with app store payment systems.