A Second Report, Not a Verdict
On July 27, 2026, the Japan Fair Trade Commission published the latest compliance reports Apple and Google filed under the Mobile Software Competition Act (スマホソフトウェア競争促進法, MSCA), covering December 18, 2025 — the date the law took full effect — through March 31, 2026. It is the second such disclosure; the first was simply the launch-day filing the two companies submitted the moment the statute became binding, which the JFTC published back in February. This report is the first one that actually covers a period of operation, which is why it is being read as an early report card rather than a formality (JFTC press release, July 27, 2026).
The JFTC designated Apple, Apple's iTunes K.K. subsidiary, and Google as regulated "specified software operators" across mobile OS, app store, browser, and — for Google — search engine functions, and requires them to file periodic self-reports on how they've adjusted practices around app distribution, billing, and interoperability (JFTC, Mobile Software Competition Act overview).
What Actually Moved
The headline numbers are real. Apple's standard in-app commission fell from 30% before the law to 26% now. Google, still at 30%, has committed to cutting its rate to 25% by the end of September 2026 (Nikkei, July 2026). Both companies also report enabling alternative app marketplaces and expanding alternative billing options — the core structural remedies the MSCA was built to force.
The Catch Is in the Redirect Fee
The complication is what happens when a developer tries to route a user to payment outside the platform's own checkout, which is the mechanism the law was actually designed to unlock. Apple charges 21% on purchases completed through an external link; developers say Google's comparable rate lands around 26%. Add roughly 5 percentage points for third-party card processing that Apple and Google no longer absorb, and the effective cost of "alternative" payment converges back toward — in some cases exceeds — the in-app commission it was supposed to undercut (Nikkei xTECH, developer reaction, 2026).
The Mobile Content Forum, a coalition of Japanese app publishers, made exactly this point in a formal opinion filed January 29, 2026: it argued the calculation basis for these external-payment fees is unexplained, and pointed to the U.S. market — where court-ordered changes following the Epic v. Apple litigation pushed comparable outbound-link fees toward zero — as the benchmark Japan should be matching rather than undercutting only nominally.
What the Regulator Itself Says
Crucially, the JFTC is explicit that the compliance reports are not independently verified findings — they "represent only the views of the designated operators, not the views of the Commission" (JFTC, July 27 release). Alongside publication, the agency opened both a general market-information intake form and a separate violation-reporting channel, and stated plainly that "current conditions cannot be deemed entirely problem-free," calling for "continued dialogue toward further improvement." That is regulator-speak for: the numbers look better, the underlying complaint hasn't gone away.
Steelmanning the Dialogue-First Model
It's worth taking Japan's approach seriously on its own terms before critiquing it. The MSCA deliberately chose negotiated, iterative compliance over the EU Digital Markets Act's fines-first posture — reportedly up to 10% of global turnover for DMA breaches. A dialogue model lets a regulator extract concessions without forcing platforms into defensive, box-checking postures aimed at minimizing legal exposure rather than genuinely opening markets. Japan's law is eight months old; giving operators room to adjust architecture without an immediate penalty clock is a defensible way to avoid chilling investment in what is still a young jurisdiction for ex ante platform regulation — especially one that can free-ride on concessions Apple and Google have already made under EU and U.S. pressure.
Why the Numbers Still Matter More Than the Process
That argument holds only if dialogue produces outcomes, not just declining headline rates with fee architecture engineered to preserve the status quo underneath. Six companies had expressed interest in launching rival app stores as of March 2026, per the JFTC's own account — a real signal of entry pressure the law deserves credit for — but interest is not market share, and the redirect-fee math developers describe gives few of them reason to actually build. A regulator that concedes it cannot verify the very numbers it publishes, and that relies on an open-ended "dialogue" rather than a defined standard for what a reasonable external-payment fee looks like, risks letting compliance reporting substitute for competitive outcomes.
The fix isn't to import the DMA's blunt fines wholesale — that would be disproportionate for a law barely past its first full reporting cycle, and Japan's more calibrated approach is worth preserving. But the JFTC should convert "continued dialogue" into a published, cost-based standard for what an external-payment fee may reasonably include, with a real deadline attached. Transparency requirements with teeth, not penalties by default, is the version of this law that actually delivers the competition it promises app developers.