Japan’s Mobile Software Competition Act (MSCA) officially coming into force represents one of the most consequential regulatory interventions in the global mobile ecosystem in recent years. Unlike earlier digital competition laws that broadly targeted online platforms, the MSCA zeroes in on the structural power of mobile operating systems, app stores, browsers, and search services—areas where a handful of companies shape how billions of users interact with the digital world.
As one of the designated companies under the Act, Google now faces a delicate balancing act: complying with new competition mandates while preserving the safety, security, and interoperability that have defined Android and Google Play for over a decade. Google’s response offers a revealing case study in how large technology platforms are adapting to a regulatory environment that increasingly favors openness, user choice, and competitive neutrality.
Rather than positioning compliance as a reluctant obligation, Google has framed its MSCA strategy as an evolution of principles it claims to have long embraced—choice, flexibility, and innovation—while warning that careless enforcement could undermine user trust and ecosystem security.
Understanding the Mobile Software Competition Act
The MSCA was designed to address concerns that dominant mobile platform providers could unfairly advantage their own services, restrict alternatives, or impose rigid commercial terms on developers. In Japan, regulators have taken a notably pragmatic approach, seeking to introduce competition-enhancing rules without dismantling the technical foundations that keep mobile ecosystems secure and reliable.
The law introduces obligations around default settings, billing systems, app distribution, and user data control. Importantly, it also recognizes “justifiable grounds” for platform operators to limit certain behaviors when necessary to protect cybersecurity, privacy, or user safety. This dual focus reflects Japan’s attempt to avoid the unintended consequences seen in other jurisdictions where regulatory changes disrupted functionality or increased fraud risks.
Choice Screens and the Reframing of Defaults
One of the most visible changes Japanese users will encounter is the introduction of choice screens. While Android and Chrome have long allowed users to change default search engines and browsers, the MSCA requires that these options be actively presented rather than passively available.
As a result, users in Japan will begin seeing prompts that ask them to select their preferred search engine and browser during device setup or app updates. These screens will appear not only on Android smartphones but also within the Chrome app on iOS, reflecting the law’s cross-platform scope.
From a technical perspective, this change is straightforward. From a strategic standpoint, however, it represents a shift in how platforms think about defaults. Defaults are not merely convenience settings; they shape usage patterns, market share, and competitive dynamics. By formalizing user choice at the outset, the MSCA aims to weaken the inertia that often benefits pre-installed services.
For Google, this requirement tests its confidence that users will continue choosing its products based on perceived quality rather than placement advantage.
Alternative In-App Billing and the Economics of App Distribution
Billing has long been the most contentious issue in app store regulation. Google’s Play Store, like its competitors, historically required developers to use its billing system for digital purchases, collecting a service fee in return for distribution, security, and developer tools.
Japan’s MSCA expands the scope of alternative in-app billing, allowing all developers—not just non-gaming apps—to offer payment systems alongside Google Play Billing. This builds on Google’s User Choice Billing program, first introduced in Japan in 2022.
From an industry perspective, this is a significant shift. Billing systems are not simply payment processors; they are deeply integrated into fraud prevention, refunds, parental controls, and subscription management. Allowing alternatives introduces new complexity, both technically and economically.
Google argues that its approach preserves user safety by requiring alternative systems to meet security standards while still giving developers more commercial flexibility. Critics, however, see this as a test of whether platform fees are truly tied to value or sustained by market power.
Purchasing Digital Content Outside Google Play
Perhaps the most structurally impactful change is Google’s new program allowing developers to offer side-by-side purchase options, enabling users to buy digital content either through Google Play Billing or directly on a developer’s website.
This move directly addresses regulatory concerns about “forced intermediation,” where platforms control not only distribution but also transactions. Under the MSCA, developers gain greater autonomy over their commercial relationships with users.
However, Google has emphasized that this flexibility comes with safeguards. External purchases must comply with strict security and transparency requirements, and Google continues to warn about the risks of malware, fraud, and data misuse when transactions occur outside trusted environments.
The company’s messaging reflects a broader industry tension: how to reconcile open competition with the centralized controls that have historically protected mobile ecosystems from abuse.
Android’s Open Model as a Compliance Foundation
A central pillar of Google’s compliance argument is Android’s openness. Unlike closed ecosystems, Android already allows users to install third-party app stores, sideload applications, and customize default services across browsers, search, and authentication.
Google points to this flexibility as evidence that many MSCA requirements were effectively met before the law took effect. The company also highlights long-standing tools like Google Takeout, which enables users to export data from dozens of services, reinforcing user control over digital identities.
From a policy standpoint, this raises an important question: should regulation standardize openness across platforms, or should it recognize existing differences in architecture? Japan’s approach suggests a willingness to accommodate both perspectives.
Security, Safety, and the Risks of Over-Correction
Google’s strongest warnings relate to security. During consultations with Japan’s Fair Trade Commission (JFTC), the company cited international examples where poorly calibrated regulations weakened platform defenses, leading to increased fraud, counterfeit apps, and data breaches.
A recent survey cited by Google indicates that 79% of Japanese developers are concerned about the security implications of distributing digital content outside major app stores. These concerns underscore why Japan included “justifiable grounds” provisions in the MSCA—allowing platforms to restrict certain behaviors when genuine risks exist.
For regulators, this creates a nuanced enforcement challenge. Overly rigid interpretations could undermine user trust, while overly permissive ones could dilute the law’s competitive impact.
Collaboration With Japan’s Fair Trade Commission
Unlike more adversarial regulatory battles seen elsewhere, Google’s engagement with the JFTC has been notably collaborative. Over 18 months of dialogue shaped compliance measures intended to balance competition with technical realities.
This cooperative model may become a reference point for future digital regulation. Rather than imposing abrupt changes, Japan has emphasized iterative implementation, industry feedback, and outcome-based enforcement.
For Google, this process has allowed it to adapt products incrementally while maintaining core architectural principles.
What This Means for Developers in Japan
For developers, the MSCA introduces both opportunity and responsibility. Greater billing and distribution flexibility could improve margins and customer relationships, but it also increases operational complexity.
Developers opting for alternative billing or external purchases must manage security, customer support, and compliance independently. Smaller studios, in particular, may weigh whether the trade-offs justify the potential benefits.
In this sense, the MSCA does not simply redistribute power—it reshapes incentives across the ecosystem.
Global Implications Beyond Japan
Japan’s MSCA is being closely watched worldwide. Policymakers in other regions are studying whether its balanced approach can avoid the disruptions seen in earlier regulatory experiments.
For Google, the Japanese experience may serve as a blueprint for future compliance strategies, influencing how Android and Google Play evolve globally.
The broader message is clear: the era of largely unregulated mobile platforms is ending, replaced by a negotiated model where law, technology, and market forces continuously interact.
FAQs
1. What is Japan’s Mobile Software Competition Act?
It is a law regulating mobile platforms to promote competition and user choice.
2. Why does the MSCA affect Google?
Google is a designated company due to Android and Google Play’s market role.
3. What are choice screens?
They prompt users to actively select browsers and search engines.
4. Can developers now use alternative billing?
Yes, all digital content apps in Japan can offer alternative billing systems.
5. Are purchases outside Google Play allowed?
Yes, under a new program with security requirements.
6. Does Android still allow third-party app stores?
Yes, Android has long supported third-party app distribution.
7. How does Google address security concerns?
Through safeguards, encryption, and “justifiable grounds” provisions.
8. What role does the JFTC play?
It oversees enforcement and worked collaboratively with Google.
9. Does this affect users outside Japan?
Directly no, but it may influence global platform policies.
10. Is this a model for other countries?
Many regulators are watching Japan’s approach closely.