​Big Data, antimonopoly law study may put brakes on Japan's data market growth


🔊 Podcast

Listen in as MLex Senior Tokyo Correspondent Toko Sekiguchi talks with our Managing Editor in Asia David Plott about a recent Japan Fair Trade Commission report on the competition issues surrounding Big Data.


7 June 2017. By Toko Sekiguchi.

A Japan Fair Trade Commission report on competition issues surrounding Big Data may raise the bar for companies struggling to find ways to monetize data at a time when the Japanese government is hailing the information economy as Japan's key to future growth.

A JFTC expert panel report released yesterday concluded five months of discussions on the commission's concerns over certain methods of data collection and access. It is the first such study outlining the Japanese antitrust regulator's thinking on the digital economy. 

The report said that data collection and usage issues included concerns over abuses of superior bargaining positions in data gathering, denying competitors access to essential data without just cause, and tying purchases of datasets to analytics services.

The JFTC said the commission had set a fairly high bar for the types of behavior it could consider to be in violation of the nation's antitrust laws in deference to the debate over innovation versus regulation.

For example, refusing data access to competitors may be problematic if the data were held by a dominant market player and had previously been available to competitors. Unjust collection or withholding of data — either under contract or by law — could also violate Japan's Antimonopoly Act, the report said.

"We're aware of the costs companies incur for collecting and storing Big Data on a large scale and the continuously evolving technology changing the market," Osafumi Kio, director of the JFTC's economic research office told MLex. "The key is striking the correct balance between regulating anticompetitive behavior and allowing for innovation," he said.

An official present as an observer at the JFTC's data panel meetings told MLex that the antitrust discussions were in line with the administration's Big Data strategy of defining the rules of enforcement while encouraging usage.

Japan's industrial policymakers are also pushing for a more open data market as an intellectual property management strategy as they discuss proprietary issues related to information gathered by connected devices, such as the Internet of Things, or IoT. Their objective is for shared Big Data to drive both competition and innovation.

However, businesses have expressed frustration over the government's eagerness to put rules in place before Japan's data economy has a chance to become globally competitive. A white paper on the country's manufacturing sector released yesterday continued to push the IoT for manufacturers to evolve their businesses, while acknowledging that companies were still struggling to use data already collected for purposes other than increasing production efficiency.

In the JFTC's report, data portability, as adopted in the EU, was deemed necessary to combat the lock-in effects of major social networking sites and their continued market dominance.

"Some type of policy measure is desirable," the report said, in the absence of personal data portability.

But MLex understands that the government has decided to postpone discussions on data portability in Japan for now following protests by business that Japan's data market needed time to mature.

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