The Japan Fair Trade Commission had been investigating Google LLC for 1½ years before it issued its first cease-and-desist order on Tuesday against the tech giant for violating the Antimonopoly Law, claiming the U.S. firm forced smartphone makers to install its search engine app.

The event highlighted the Japanese competition watchdog taking a tough stance against a strong business model established by the tech company, which boasts the No. 1 search engine. The order also has become a turning point for Japan to strengthen regulations on the matter.

"This is a big step forward regarding cases in the digital field," said Masaru Ogo, director general of the commission's Investigation Bureau, to reporters on Tuesday regarding the significance of the JFTC finding the act a violation of the law for the first time.

Amid the global trend of beefing up surveillance of tech giants, the JFTC began monitoring tech companies in 2016. However, the commission's conventional methods of on-site inspections and interviews did not work well with IT firms based in the United States.

As a result, the JFTC had previously prioritized correcting wrongdoings and concluded investigations by applying commitment procedures, a scheme to resolve suspected violations voluntarily by consent between the JFTC and the business operator.

However, this time was different.

In October 2023, the JFTC held a press conference to announce the start of an investigation into Google — its first press conference announcing such an investigation — and solicited information from smartphone makers and other parties.

After accumulating evidence, such as business contracts, the JFTC determined that Google's business model — backed by its dominant position in the market with more than 80% of Android device users using Google Play — constituted restrictive trading, which is prohibited by the law. The JFTC then determined that Google's act violated the law.

The JFTC issued a cease-and-desist order while also requiring a third party to monitor Google's compliance for a period of five years.

It is the first time that such a surveillance measure was added to the order, and the JFTC intends to continue checking whether Google is complying with the order.

"It is significant that the JFTC officially found the tech giant's business activity to be a violation of the Antimonopoly Law," said Tohoku University Prof. Daisuke Korenaga, who is an expert on the law. "The measures to prevent recurrence are also well thought out and expected to have a deterrent effect."

Regulations to be strengthened

Smartphone-related contracts, as seen in the recent Google case in Japan, had already been a concern for antitrust authorities in the United States and Europe.

In 2020, the U.S. Justice Department filed a lawsuit against Google in a similar case, claiming it had violated an antitrust law. In August 2024, a U.S. district court ruled that Google had violated the law, and the company lost the case.

In 2018, the European Commission announced it would impose a penalty payment of more than €4 billion on Google for violating the EU competition law in a similar case. In 2022, the General Court upheld the decision.

The JFTC is trying to put more restrictions on Google.

The Law on Promotion of Competition for Specified Smartphone Software, which will come into full force in December, will regulate search engines and app stores. It will prohibit the preferential display of a company's own related services over similar services from other parties in search results. It will also require companies to allow users to easily change pre-installed apps.