On August 29, 2019, the Japan Fair Trade Commission ("JFTC") published draft "Guidelines Concerning Abuse of a Superior Bargaining Position under the Antimonopoly Act on the Transactions between Digital Platform Operators and Consumers that Provide Personal Information, etc." ("Guidelines") and opened the matter for public comment.
Under the draft Guidelines, digital platform operators who acquire personal information from consumers are subject to additional regulations concerning their conduct. The draft Guidelines characterize a "digital platform" as an information technology system through which third parties provide various services and that facilitates multi-sided markets with multiple user segments. Online shopping malls, app markets, and search engines all fall under this category.
According to the draft Guidelines, a digital platform operator has a "superior bargaining position" in cases where consumers must endure mistreatment from the operator in order to use its digital platform, and an "abuse" of superior bargaining position occurs when an operator with such superior bargaining position unjustifiably acquires or uses the personal information of a consumer and this causes disadvantage to the consumer. Examples of such abuse may include acquiring personal information without providing the purpose, using personal information beyond the scope of its intended purpose as understood by the consumer, or acquiring and using personal information without taking precautions to properly safeguard that information. Such conduct will be examined on a case-by-case basis in light of normal business practices and from the viewpoint of maintaining and promoting fair competition.
However, the scope of the abuses of superior bargaining position in the draft Guidelines remains ambiguous. In particular, it is unclear how certain types of abuse would have harmful effects on competition or why each type has to be regulated as an abuse of superior bargaining position under the Antimonopoly Act. Despite such ambiguity, it will be important for any company operating a digital platform to carefully consider whether there is any risk that its actions could be viewed as an abuse of its superior bargaining position.
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