Japan's Competition Regulator Says Tech Giants' Integration of Own Generative AI into Services Could Violate Antimonopoly Law
The Japan Fair Trade Commission head office in Chiyoda Ward, Tokyo
The Japan Fair Trade Commission stated that tech giants integrating their own generative AI into their existing products with the intent to interfere with rival companies' business, this could constitute 'tie-in sales' or 'private monopolization' in violation of the Antimonopoly Law, in a report on its investigation into the generative AI market published Friday.
There is a trend in the digital market for Big Tech companies, particularly Google, Apple, Facebook (now Meta), Amazon and Microsoft, to integrate their own generative AI services into their products. For example, Google search results include AI-generated summaries, while Microsoft has incorporated generative AI into office software like Word to assist with writing documents.
According to the report, competing AI development companies expressed concerns to the JFTC that dominant firms could gain an advantage in the distribution of generative AI by integrating generative AI products into existing digital services and that it would become difficult to have users adopt latecomer firms' generative AI products.
The JFTC noted that the integration of generative AI products into existing services by tech giants and other companies is a 'method of technological innovations and such an act itself is not immediately problematic under the Antimonopoly Law.' However, the commission also argued that if the purpose is to hinder competitors' businesses or raise barriers to entry, there is a risk of violating the law.
Regarding the integration of generative AI on smartphones, related companies have expressed concerns. One company said 'restricting access to the software necessary to run our generative AI will cause a competitive disadvantage.'
As Google and Apple have a monopoly on the the basic software for smartphones, the commission expressed the view that such access restrictions could also constitute 'interference with a competitor's transactions' in violation of the Antimonopoly Law.
This is the first edition of the report, and the JFTC plans to continue to watch the situation and publish follow up reports as needed.
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