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Japan to toughen scrutiny of tech companies' vendor contracts

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Japan to toughen scrutiny of tech companies' vendor contracts

The Japanese government is proposing a law that would require companies such as Amazon.com Inc., Alphabet Inc. unit Google LLC and Facebook Inc. to disclose the terms of their contracts with vendors, The Mainichi reported.

Under the bill, digital companies would need to provide information about changes to the contracts and allow the vendors to submit complaints. The companies would also be asked to submit regular reports about their operations, with the government issuing warnings and orders for noncompliance.

The proposal, which seeks to protect small vendors from potentially abusive practices by tech companies, will be submitted to parliament in 2020, according to the report.

The government will also look to revise the country's personal information protection law to allow users to prohibit companies from using their information. Furthermore, it plans to evaluate how ad-targeting practices as well as potential mergers of IT companies could impact the use of personal data.

Japan's Fair Trade Commission is reportedly working to crack down on tech companies' alleged attempts to collect personal data using their dominant market position. The country also plans to form a new watchdog that would monitor the companies' activities.

Most recently, Australia unveiled tougher regulatory measures to address the "adverse effects" of the market dominance of digital companies.