How is the gaming industry changing due to the "Smartphone New Law"? Insights from a lawyer on potential shifts in app monetization methods and developments after December 2025
Note: the original Japanese article can be found at:
https://www.4gamer.net/games/999/G999904/20251023051/
Editorial Department: Instruments Photographer: Nagayama Wataru | 2025/11/01 00:00 (UTC)
December 18, 2025 will see the full enforcement of a new law known as the “Smartphone New Law.”
Law No. 58 of Reiwa Year 6: “The Act on Promotion of Competition Regarding Specific Software Used in Smartphones,” or the Smartphone Software Competition Promotion Act (MSCA), commonly referred to as the “Smartphone New Law,” is legislation designed to dismantle oligopolistic market conditions dominated by a small number of companies within the smartphone industry.
Put more simply, this could mean that users might soon be able to access cheaper in-app payment systems on iOS and Android apps than those currently available.
Before diving into the main topic, let’s quickly summarize.
First, companies subject to regulation under the Smartphone New Law are designated as “designated operators.” While the law takes full effect in December 2025, the Japan Fair Trade Commission (JFTC) has currently designated three firms: Apple Inc., iTunes Co., Ltd., and Google LLC.
The regulated areas include four types of software—OS, app stores, browsers, and search engines—which are collectively referred to as “specific software.” Designation applies based on combinations of companies and specific software. Considering the above-listed designated operators, the following services fall under regulation:
Apple (iTunes) | Google
—|—
OS: iOS | Android
App Store: App Store | Google Play
Browser: Safari | Google Chrome
Search Engine: — | Google Search
As for how these will change, here are the key points:
- “Do not obstruct other companies from providing app stores.”
- “Do not restrict use of payment systems outside your own company.”
- “Do not limit price displays or guidance links when using external in-app payments.”
- “Allow users to choose their smartphone browser and search engine.”
- “Handle various data types with greater transparency than before.”
We’ll go into more detail later, but the biggest focus for the gaming industry lies in the long-standing criticism that both App Store and Google Play charge a 30% commission fee on app sales—considered excessively high.
In short, when publishing apps through either store, 30% of revenue is collected by the platform (note: fees may be reduced under certain circumstances). Publishers adjust their pricing accordingly, which in turn forces users to pay higher prices for items.
This situation will now be corrected. Going forward, companies can more confidently claim that “using our own app store or payment system means you save money—buying game currency becomes cheaper.” Of course, it’s possible the fee savings may not materialize significantly; if so, we’ll see which entities become targets of public criticism.
We spoke with Kotaro Maeno, a lawyer at CITY LIGHTS LAW, to get insight into how this Smartphone New Law will be interpreted in practice. Image Gallery No.002 thumbnail / How will the gaming industry change with the “Smartphone New Law”? The app billing system may shift—what to expect after December 2025, explained by a lawyer
While the Smartphone New Law avoids emotional bias and aims to create a level playing field for all parties, it’s easy to interpret its core message as “Dismantle Apple & Google’s empire!” However, we must recognize that the designated operators have spent years optimizing their services through innovation—this is why oligopolistic dominance has persisted. The new law opens up opportunities for third-party players to access previously closed markets.
Given how understandable both sides’ positions are, it’s best to adopt a neutral perspective and re-evaluate matters with fairness in mind.
Note: This article was written based on information available as of October 21, 2025. Please refer to updated announcements from the JFTC or designated operators for any new developments.
[The Era of Free Competition in Mobile Gaming]
Maeno:
To begin with, I should clarify that this Smartphone New Law isn’t aimed at regulating game developers or users—it’s designed to regulate certain companies dominating the market and promote competition. In turn, this will ultimately benefit consumers.
Simply put, it’s a law targeting Apple and Google in Japan.
4Gamer:
So we’re talking about how much room new entrants can exploit in this emerging gap?
Maeno:
Exactly. Game developers aren’t being assigned any obligations under this law—but understanding the benefits they stand to gain is crucial.
However, many inquiries we’ve received recently still ask: “What exactly is the Smartphone New Law?” It’s clearly not yet widely known.
4Gamer:
There’s no clear “hot news” story or dramatic example to illustrate the law’s impact.
Maeno:
That brings us back to why this law came into being in the first place.
Maeno:
Smartphones have been widespread in Japan for a long time, but certain foundational software has remained oligopolistic. Take app stores—almost all smartphone apps are distributed via App Store or Google Play. Both platforms charge publishers a 30% fee on sales.
So if a game company earns ¥1,000 from a user, only ¥700 remains after the cut. From the user’s perspective, they’re effectively paying for an item worth only about ¥700.
4Gamer:
That’s a familiar middleman margin in Japan.
Maeno:
The core problem with oligopolies is lack of competition. If alternatives existed—such as app stores charging 20% or external payment systems at 10%—market forces would drive App Store and Google Play to compete on price.
While some official third-party “discounted item” stores have emerged, Apple and Google’s rules currently make it hard to promote them effectively, limiting competition. As a result, the 30% fee remains unchanged. This is clearly detrimental for anyone not in the oligopoly position.
This imbalance prompted the creation of the Smartphone New Law.
4Gamer:
Let’s get back to specifics later—does this law apply beyond smartphones? For example, PC or tablet app stores, or dedicated gaming consoles?
Maeno:
Not directly. The law specifically targets OSs, app stores, browsers, and search engines used on smartphones. This focus was intentional—to quickly address the long-standing oligopoly in smartphone ecosystems.
4Gamer:
So this specificity is key to achieving swift action.
Maeno:
Exactly.
4Gamer:
Let’s clarify the definitions of “specific software” and “designated operators.”
Maeno:
Specific software refers to four categories: OS, app stores, browsers, and search engines. Designated operators are companies providing such software that meet certain scale thresholds, as determined by the JFTC. Only after formal designation do these companies become subject to regulatory restrictions.
4Gamer:
Which companies currently qualify for this designation?
Maeno:
Designation applies to firms meeting criteria set by the JFTC—such as having over 40 million users. In March 2025, Apple Inc., iTunes Co., Ltd. (jointly providing App Store), and Google LLC were designated. For practical purposes, this effectively means Apple and Google.
Apple (iTunes) | Google
—|—
OS: iOS | Android
App Store: App Store | Google Play
Browser: Safari | Google Chrome
Search Engine: — | Google Search
4Gamer:
When third parties enter the market under these new rules, are there any direct support measures? Or is it just “regulation done—now you’re on your own”?
Maeno:
Primarily the latter. The law doesn’t directly assist third-party companies—it indirectly supports them by restricting Apple and Google’s behavior.
4Gamer:
So that’s fair.
Maeno:
Yes, the goal is to prevent interference with free competition, not to create unfair advantages. It aims to correct existing imbalances fairly.
4Gamer:
I’m no legal expert, but aren’t there similar laws elsewhere targeting monopolistic companies?
Maeno:
The most prominent example is Japan’s Antimonopoly Act (the “Monopoly Prevention Law”).
4Gamer:
Ah yes—something we all learned in elementary school (embarrassing).
Maeno:
Indeed, the Smartphone New Law shares similarities with that. While it might have been possible to apply existing antitrust laws to this case, doing so for individual issues like OSs or app stores would take too long. Given today’s fast-moving smartphone market, such a pace wouldn’t be feasible. Hence, Japan created this specialized law tailored specifically to smartphones.
4Gamer:
In Japan’s gaming industry, aside from content-related regulations, are there other major restrictions? Is it really the complete gacha system?
Maeno:
That was regulated under the Product Display Act. I’d say this is probably the first time a law of such significant scope has been passed in the gaming sector.
4Gamer:
What about overseas examples? In Europe, similar laws have caused concerns like “the regulation covers too much and becomes unwieldy.”
Maeno:
The EU implemented its Digital Markets Act (DMA) earlier. It established broad rules upfront to regulate digital markets. The scope includes online intermediary services, search engines, social media platforms, video-sharing sites, and more. Major players such as Apple, Google (Alphabet), Amazon, and Meta are all affected—making the impact far-reaching.
In contrast, Japan’s law targets only four specific software types on smartphones, making it clearer and simpler.
4Gamer:
I’ve been hoping for a new feature in AirPods: live translation. There’s talk that such features might be blocked under these regulations because they’re hard to comply with legally—making product launches difficult.
Maeno:
Indeed, the U.S. is also moving in this direction—but unlike Japan and the EU, it’s not establishing pre-emptive rules. Instead, it relies on antitrust law (“the Sherman Act”) and aims to shape regulations through court cases. For example, Fortnite’s removal from App Store triggered litigation, which continues to drive new rule-making discussions.
These international developments have indirectly influenced Japan’s swift passage of the Smartphone New Law.
4Gamer:
It’s hard not to feel that Japan tends to take a more reactive and cautious approach—so “create broad rules first, then see what happens” feels quite characteristic.
Maeno:
Just for clarification: The JFTC has been actively involved in this issue from an early stage. They’ve conducted extensive hearings with various companies, proactively investigating their challenges. Results were published in 2023, leading to the law’s passage just one year later.
Moreover, the JFTC has held active explanatory sessions this year and even gave a talk at Tokyo Game Show 2025—demonstrating strong engagement.
Source: Extracted from “Appendix 2: Legal Summary” on the JFTC website regarding the enactment of the Act on Promotion of Competition for Specific Software Used in Smartphones (https://www.jftc.go.jp/houdou/pressrelease/2024/jun/240612_digitaloffice.html) Image Gallery No.004 thumbnail / How will the gaming industry change with the “Smartphone New Law”? The app billing system may shift—what to expect after December 2025, explained by a lawyer
4Gamer:
So the JFTC seems busy with new responsibilities.
Maeno:
Indeed, it appears so.
[Delving into Specific Regulatory Provisions]
4Gamer:
Now let’s explore the specific regulatory provisions.
Maeno:
Understood.
■Summary of Specific Regulatory Provisions
Extracted from “Appendix 2: Legal Summary” on the JFTC website regarding the enactment of the Act on Promotion of Competition for Specific Software Used in Smartphones (https://www.jftc.go.jp/houdou/pressrelease/2024/jun/240612_digitaloffice.html) Image Gallery No.005 thumbnail / How will the gaming industry change with the “Smartphone New Law”? The app billing system may shift—what to expect after December 2025, explained by a lawyer
4Gamer:
First, what does “restriction on competition between app stores” mean?
Maeno:
For example, iOS apps have traditionally been distributed only through the App Store—Apple’s terms previously prohibited third-party app stores from distributing iOS apps.
But under the Smartphone New Law, Apple is now forbidden from obstructing other companies from providing their own app stores.
This means we may soon see independent app stores for iOS.
4Gamer:
A clear example might be China’s smartphone game market, where Google restrictions led to a proliferation of third-party platforms.
Maeno:
Yes—but it’s uncertain whether Japan will develop the same situation. While new app stores become feasible, actual competition will still depend on brand trust and user choice.
Currently, Epic Games has announced plans to launch an “Epic Games Store for iPhone/iPad” by end of 2025, but other providers are left to their own discretion.
4Gamer:
It’s hard to imagine App Store and Google Play becoming obsolete—especially since users are so accustomed. That may change in the long run.
Maeno:
So, for immediate impact on gaming, two areas stand out: restriction of non-designated payment systems and limitations on providing user information within apps. Let’s discuss those.
Maeno:
The first prohibits restricting use of third-party payment systems—such as processing in-app purchases via external services outside App Store or Google Play. Charging unjustified fees during such transactions is also forbidden.
The second means app developers can no longer be blocked from displaying prices for items sold externally, nor from showing links to web pages outside the app.
4Gamer:
What happens when these two provisions are combined?
Maeno:
Together, they allow game companies to present cheaper payment options within apps and display direct links to external stores. However, security-related exceptions may apply—so Apple or Google might still impose certain restrictions. Exactly how this transition will work remains unclear.
4Gamer:
Will users be able to make one-tap payments through external systems without any screen transitions, using familiar in-app gestures?
Maeno:
It’s uncertain. Given the current lack of clarity on Apple and Google’s response, the most likely initial scenario is that users will need to navigate directly to an official third-party store for payment.
4Gamer:
But before this law, developers couldn’t even show links or information about cheaper external stores—many players didn’t know they could buy game items more affordably elsewhere. Simply being able to display such information within apps would already mark a major shift.
4Gamer:
The concept is different—but in terms of usage and pricing, it’s similar to the contrast between carrier services and low-cost smartphones.
Maeno:
In that sense—just needing one extra step can save money—it’s comparable.
4Gamer:
Also, I’m concerned about overseas external payment providers entering Japan—and potentially triggering new tax issues.
Maeno:
That falls under international taxation policy, so it’s a separate discussion.
Still, Japan is now an attractive market—so we may see even more global payment service providers enter the space.
4Gamer:
So far, it sounds like only non-designated companies benefit—but are there concerns from other stakeholders?
Maeno:
Yes—especially security risks. For example, loosening Apple and Google’s controls might make it easier to download malicious apps or expose minors to harmful content due to weakened filtering.
4Gamer:
A crucial consideration today.
Maeno:
However, the law already includes safeguards. While the EU requires app stores to allow direct downloads from websites, Japan chose not to impose this—due to security concerns.
Additionally, restrictions on competition between app stores are permitted only when justified by cybersecurity needs.
4Gamer:
So it’s about preventing situations where users download apps from new stores that contain malware?
Maeno:
Exactly. Currently, App Store and Google Play both conduct thorough reviews of app content before publication—protecting users from various forms of consumer harm.
Thus, even under the Smartphone New Law, providers can still impose restrictions on third-party app stores if justified by cybersecurity concerns.
Similarly, external payment links may be restricted for security reasons—for example, showing a neutral warning pop-up when tapped is acceptable.
4Gamer:
Even with an open market, safety remains a major barrier. Japanese gamers like me will definitely scrutinize these aspects.
Maeno:
From a legal standpoint, the term “obstruct” allows room for argument—such as claiming that a rule doesn’t actually obstruct competitors but merely sets high standards. For example, making app store approval extremely difficult by imposing strict review criteria—even if anyone can theoretically launch one—is technically not obstruction—but effectively prevents entry.
4Gamer:
Very much a lawyer’s argument.
Maeno:
Indeed—the JFTC has already issued guidance stating that setting excessively high fees or overly strict review standards constitutes “obstruction.”
Still, interpretation remains open. There is ample room for negotiation and legal back-and-forth before the law takes effect.
4Gamer:
So everything hinges on this final negotiation.
Maeno:
Yes. Apple and Google will likely announce their responses before December 2025. The JFTC will then review them closely, possibly asking for adjustments—especially if feedback from industry stakeholders suggests problems.
4Gamer:
And since different companies may have different priorities, could rules differ between iOS and Android?
Maeno:
Absolutely. Even now, there are slight differences in how the rules apply to each platform—so final alignment will depend on negotiations.
4Gamer:
Recently, I spoke with several stakeholders involved in the Smartphone New Law. Everyone shared a similar sentiment: “We can’t commit to anything strong until we see what actually happens come December.”
Maeno:
Exactly—as I mentioned in our previous interview on Terms of Service, platform rules often hold more weight than laws themselves. Even if legally compliant, developers must still follow platform rules—or risk losing app distribution entirely.
Therefore, it’s hard to plan strategy without seeing the final platform policies—your point is valid.
That said, providers won’t ignore the Smartphone New Law completely. So exploring external payment systems or other alternatives now makes sense.
4Gamer:
By the way, this is also a message for us in media: many stakeholders told me they’re concerned about being portrayed as “heroes trying to overthrow Apple & Google’s empire.” They worry that such framing gives them an overly ambitious image—potentially undermining future brand storytelling. So please—don’t portray us like that (laughing). We just want to be seen as genuine, forward-looking challengers—even if in reality we’re more like gold rush prospectors with pickaxes.
Maeno:
In truth, it’s a gold rush (laughs). Few companies can build their own app stores or payment systems—so naturally, profit-driven firms will aim to become new platform players. This is exactly what the Smartphone New Law intended: fostering genuine competition.
4Gamer:
Personally, I think app stores focused on online communities could be promising—though the development cost would be enormous. It’s really up to how ambitious one wants to be.
As for external payments, large game companies might create their own systems—offering better prices and bundling perks (like free merchandise or entry into live draws) with purchases. That could enhance brand value.
Maeno:
That kind of initiative is very plausible. Such moves would drive user numbers and fee changes—sparking healthy market competition. Ultimately, consumers are the ones hurt by unhealthy markets.
But if one external payment system becomes dominant, it may raise fees in the future.
4Gamer:
Ah yes—the same pattern we’ve seen with PayPay or Uber Eats…
Maeno:
(Laughs). Still, healthy competition would encourage other providers to offer better rates and services—so a single monopolist is unlikely.
4Gamer:
Let’s return to the main topic. Are there any other key regulations?
Maeno:
Yes—another major provision bans designated operators from treating app developers unfairly.
This applies beyond gaming: occasionally, users hear stories like “our app was rejected without explanation” or “our app got banned suddenly.”
Now, such incidents can be challenged as unfair treatment. While the developer must still comply with policies, this is a crucial new protection.
4Gamer:
I’ve heard of cases where critically important games were rejected during review and had to be abandoned—though it was rare.
Maeno:
It’s not just about app reviews. If any form of unfair treatment occurs, developers should consider using this provision as grounds for appeal or reporting to the JFTC.
Next, “restrictions on access by other companies to OS-controlled features” requires designated operators to open up their operating system functions equally to all providers. This will make it easier for game developers to create apps leveraging OS capabilities—such as better device integration.
4Gamer:
This affects creators too.
Maeno:
Additionally, the ban on “prohibiting use of non-designated browser engines” is unrelated to games—but Apple and Google can no longer block other browsers from being used.
Similarly, “preference for own services in search results” means they cannot prioritize their own offerings during searches.
4Gamer:
If smartphone and PC search results differ starkly—it’d be interesting.
Maeno:
Also omitted in the summary materials: using social login features within apps can no longer force developers to use Apple or Google’s methods. For example, iOS apps don’t need to include “Sign in with Apple” as an option—this directly affects game companies.
4Gamer:
Exactly—the kind of detail one should know and leverage.
Maeno:
Then there’s the requirement for default settings on designated operators’ services: users must be able to easily change defaults during initial setup. Operators cannot fix browsers or search apps exclusively to their own—must show alternative options.
For example, currently Safari is default on iOS; Chrome on Android—but now, users must see alternatives. Though not directly related to games, this matters.
4Gamer:
Still, personally, the part that bothers me most is: “Make it simple to use.” Isn’t this just an executive’s opinion?
Maeno:
The JFTC has issued specific guidelines—such as consolidating settings into one easily accessible screen or displaying text indicating users can change defaults. Following these would likely avoid issues.
4Gamer:
So no more endless menu-hopping to cancel a subscription?
Maeno:
Yes, similar idea—users should be able to access key settings with fewer steps.
4Gamer:
Still, this section is the only one in the Smartphone New Law that goes beyond layout and actually dictates creative design. I’m not personally bothered—but it might really irritate Apple or Google’s designers.
Maeno:
Absolutely possible—Apple and Google staff may argue: “What’s so complicated about this?”
But more broadly, we should question whether designing features to favor one’s own business should count as “creativity.” For example, Amazon’s dark patterns (complex designs that encourage paid subscriptions or make cancellation hard)—are these really creative?
Should such tactics be accepted under the same term as game development creativity? It’s a relevant debate—even if not directly tied to the Smartphone New Law.
4Gamer:
You’re right. Using “creativity” unilaterally to justify manipulation is problematic—this point is essential.
Moving on: regarding browser and search engine choice, how are providers selected? Are they chosen by hand-raisers or just imposed by designated operators?
Maeno:
The law requires displaying multiple software options based on objective and reasonable criteria.
4Gamer:
So saying “iOS uses Safari/Chrome; Android uses Chrome/Safari” isn’t a loophole—right?
Maeno:
Correct. As long as selection is objectively and reasonably justified, it’s acceptable. But deliberately choosing that setup offers no benefit—it might even backfire by directing users to your main competitor. So it wouldn’t be an effective loophole.
4Gamer:
True. In reality, I’d hope to see more diverse choices—like Sleipnir or Firefox as default browsers.
Maeno:
Browser options may be easier—but search engines are trickier, since Google dominates on smartphones.
4Gamer:
In Japan, maybe Yahoo! Search or Microsoft Bing? Still, regardless of how many choices exist, I suspect some users will still prefer “smartphone: alternative engine; PC: Google”—so the dominance might not shift much even under this law.
Moving on—what about data handling?
Maeno:
The regulations on data use are detailed—but the core is a ban on “unfair use of data” by designated operators.
Currently, Apple and Google can access app usage patterns and revenue data from popular apps—a powerful advantage. But these are internal company secrets that others shouldn’t have access to. Using such data allows them to create competitive services with their already strong resources.
To prevent this, the law now limits how they use acquired data—and requires transparency in collection conditions.
4Gamer:
That makes me wonder about past practices. Leaving that aside, could the scope of designated operators or specific software expand after December 2025?
Maeno:
No major changes are expected soon—but expansion is possible depending on circumstances. Reductions are not likely.
4Gamer:
If a designated operator violates the law, they may face exclusion orders or fines—will these measures be effective?
Maeno:
Enforcement comes after JFTC investigations—so effectiveness depends on how actively and flexibly the commission operates. The JFTC has already held explanatory sessions and talks at events like Tokyo Game Show 2025, inviting input from stakeholders. While we won’t know for sure until enforcement begins, my personal view is that the JFTC will remain proactive in applying this law.
If Apple or Google’s actions cause problems, consider reporting to the JFTC’s Smartphone New Law consultation desk.
4Gamer:
Eventually, designated operators may adapt and comply—but what if they stubbornly refuse? Would we end up with a Japan where App Store and Google Play no longer exist?
We’ve seen platforms vanish in other countries due to regulation. But this is unlikely—Apple knows the high value of its market share in Japan.
Moreover, withdrawing from Japan under these regulations would likely force Apple and Google to exit EU and U.S. markets too. So a Japanese withdrawal seems highly improbable for now.
Most importantly: the Smartphone New Law isn’t about eliminating designated operators—it’s about correcting excessive oligopoly to foster healthier competition. The JFTC is actively engaging with Apple and Google, so we’ll eventually see appropriate rules set.
4Gamer:
I see. Thank you for your time today—I now have a clearer sense of the Smartphone New Law.
Maeno:
For my final advice: at present, many people still don’t know about this law—so awareness is low. As more seminars and information-sharing events emerge, please first understand that “this law can be a tool or weapon for you.” Ideally, study it thoroughly to grasp what new advantages are now available.
The JFTC actively publishes information online. If you’re a business operator, consult with your legal counsel—and start planning your strategy for the future smartphone gaming market.
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