Japan’s antitrust watchdog, the Japan Fair Trade Commission (JFTC), recently issued an exclusion order against Google, marking the first time such a decision has been made against a giant IT company. The order comes in the wake of Google’s aggressive tactics to ensure its search service is pre-installed on smartphones, a move deemed to violate Japan’s antimonopoly law. This is a crucial development as the global tech industry sees increasing scrutiny of major players amidst the rise of AI-powered search services.
Events
On April 15, 2025, Japan’s JFTC issued an exclusion order against Google, accusing the company of violating antimonopoly laws by forcing smartphone manufacturers to pre-install Google Search and the Chrome browser on their devices. This was found to be an unfair trade practice under Japan’s Antimonopoly Act, which prohibits dominant players from imposing constraints on competitors.
The investigation focused on two key agreements between Google and smartphone manufacturers, particularly those involving Android-powered devices. These agreements, which began no later than July 2020, required manufacturers to ensure that Google Search and Chrome were set as the default services on the initial screen of smartphones, making them more prominent and accessible to users.
The agreements affected roughly 80% of Android phones sold in Japan, and manufacturers who entered these contracts were also required to exclude competing services from the initial screen. Additionally, Google entered into revenue-sharing agreements with five telecommunications companies, further strengthening its dominance.
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With the rise of AI-driven “conversational search,” which promises more intuitive and user-friendly search experiences, new competitors are gaining traction. The JFTC is keen to prevent Google from maintaining its dominant position, fearing that the current market environment could hinder new players from entering the search engine space.
The exclusion order requires Google to cease forcing manufacturers to pre-install its services and prevent the exclusion of competitor apps. Google will also need to relax its revenue-sharing agreements and broaden the choices available to manufacturers. Furthermore, the company will be required to submit annual reports on its compliance for the next five years.
This ruling is part of a broader trend of tightening regulation on tech giants. In 2018, the European Commission imposed a €4.34 billion fine on Google for similar practices related to Android. Additionally, the U.S. Department of Justice has also been scrutinizing Google’s business practices, particularly with regard to its search engine monopoly.
What Undercode Says:
Google’s ongoing dominance in the search engine market has long been a point of contention for regulatory bodies around the world. With approximately 90% of the global search engine market share as of March 2025, and over 80% in Japan, Google’s stronghold in the industry is undeniable. However, the company’s business practices—particularly its efforts to impose its services on Android smartphones—have raised significant concerns.
From a competitive perspective, the practice of forcing manufacturers to pre-install Google Search and Chrome undermines the principles of fair competition. It restricts consumer choice and stifles innovation by preventing other search engines and browsers from gaining visibility on smartphones. This is particularly problematic as the digital landscape evolves with the introduction of AI-powered search engines, which could potentially offer more efficient and personalized experiences compared to Google’s traditional keyword-based search.
Moreover, Google’s strategic partnerships with telecommunications companies and device manufacturers to share ad revenue create a financial incentive to maintain its dominance in the search engine market. These deals effectively lock in manufacturers and users, making it difficult for new players to enter the market without facing substantial barriers to entry.
While Google’s search engine continues to be a valuable tool for users worldwide, the company’s aggressive tactics to maintain its position can be seen as anti-competitive. In light of this, regulatory bodies like the JFTC are rightfully stepping in to ensure that Google’s dominance does not hinder the growth of new and innovative search technologies.
In addition to the legal implications, Google’s exclusion order highlights the increasing role of government regulation in the tech sector. Governments are increasingly willing to challenge the monopolistic behavior of major IT companies, not just to protect consumers, but also to foster a more dynamic and competitive market. The emergence of AI-driven search engines is a prime example of how new technologies can disrupt established markets, and regulators must adapt quickly to prevent monopolies from quashing innovation.
Looking ahead, the JFTC’s exclusion order sets a precedent for future cases involving tech giants in Japan. It also signals that global competition authorities are more coordinated in their efforts to curb anti-competitive practices, especially in the rapidly evolving field of digital advertising and AI.
For Google, the ruling could have lasting impacts on its business model. While the company is still far from losing its dominance, the pressure from regulators is mounting. It will need to adapt its practices, particularly with regard to revenue-sharing agreements and the pre-installation of apps, to ensure that it remains compliant with antitrust laws in Japan and around the world.
Fact Checker Results:
1. The
- Google’s business practices have been under increasing scrutiny, particularly regarding pre-installation agreements and exclusivity clauses.
- AI-driven search technologies are emerging as a serious competitor to Google’s traditional search engine, challenging the company’s longstanding monopoly.
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