Spotlight: telecoms and internet access in Japan

An extract from The Technology, Media and Telecommunications Review, eleventh Edition

Telecommunications & internet access

i Internet and internet protocol regulation

The MIC regulates internet and IP-based providers (comparable to high-speed internet and VoIP), together with wired telephony and cell phones, beneath the Telecommunications Business Act. The Act and the rules thereunder emphasise safety of the secrecy of communications and the dependable and non-discriminatory provision of telecommunications providers.

The Act not solely regulates service suppliers that function their very own community amenities, but in addition service suppliers that facilitate telecommunications between customers however don’t function their very own community amenities (comparable to devoted internet hosting providers on which shoppers can function an e mail server). Internet-based providers that aren’t designed to facilitate telecommunication, comparable to internet banking and internet-based publication and media subscriptions, aren’t deemed to be telecommunications providers and subsequently aren’t regulated beneath the Act. However, private matching providers, SNS suppliers and different companies not historically thought-about ‘telecommunications’ providers might nonetheless be regulated beneath the Act, necessitating a submitting with the MIC earlier than commencing enterprise.

ii Universal service

Under the Telecommunications Business Act and the NTT Act, the NTT group is required to offer wired telephony providers (analogue or IP over optical fibre), pay cellphone providers and emergency name providers to all areas of Japan. NTT East and NTT West5 present providers to depopulated areas, and a telecommunications commerce affiliation comprised of every of the most important telecommunications corporations in Japan, then reimburses NTT East and NTT West for any value deficits incurred by the NTT group’s provision of the service. National regulation requires every telecommunication service supplier connecting its community with that of NTT East or NTT West to pay a small price (roughly ¥2 to ¥8, various from 12 months to 12 months) per landline and cell phone quantity (buyer), which prices are usually handed alongside to particular person customers in reference to their month-to-month phone service payments. Notwithstanding such funding help, NTT East and NTT West have operated at a deficit in their landline companies as a result of burden of proudly owning and sustaining the entire amenities crucial to offer providers to the whole lot of Japan, even to quickly depopulating areas. To cut back this burden, the NTT Act was amended in May 2020 to allow NTT East and NTT West to make use of wi-fi telecommunication amenities owned by different telecommunications corporations to fulfil their duties of offering common service.

Currently, there isn’t any comparable regulation requiring common broadband service, however the MIC’s Information and Communications Council introduced in December 2019 that it’s contemplating extending common service necessities to incorporate broadband service. Notwithstanding the shortage of a proper requirement for common protection, as of 2015, the broadband infrastructure (3.5G, satellite tv for pc internet, 3.9G, DSL, optics fibre/FTTH, and so forth.) penetration charge in Japan has already reached 100 per cent, and super-broadband infrastructure (optical fibre/FTTH, 3.9G and different infrastructure with knowledge transmission velocity over 30Mb per second, together with DSL, FWA, satellite tv for pc, BWA, and so forth.) penetration charge has equally reached 99.98 per cent. That mentioned, rolling out optical fibre will probably be particularly necessary to allow the proliferation of 5G. Optical fibre’s nationwide penetration charge is 98.8 per cent as of March 2019 however it’s under 95 per cent in a number of prefectures. The MIC is planning to finish putting in optical fibre in all cities, cities and villages that need it by March 2022.

Rakuten Mobile: a brand new cell community operator service supplier

Rakuten KK, a serious e-commerce platform operator, has lengthy had the biggest market share of all cell digital community operators (MVNOs) in Japan. Its lately established subsidiary, Rakuten Mobile, was accredited to grow to be Japan’s fourth cell community operator (MNO) in April 2018. Rakuten Mobile was allotted 1.7GHz 40MHz bandwidth in April 2019, and shortly thereafter introduced the launch of its MNO providers. To consolidate its service choices, Rakuten Ok.Ok. additionally assigned its MVNO enterprise to Rakuten Mobile in April 2019.

Rakuten Mobile deliberate to launch MNO providers by October 2019, however the launch was delayed due to delays in putting in base stations. In the interim, Rakuten Mobile provided free service to round 5,000 clients in restricted areas like Tokyo and Osaka whereas its full community service was being rolled out. Rakuten Mobile launched MNO providers in April 2020, and seeks to draw clients by providing a competitively priced limitless knowledge plan – Rakuten reported that it has obtained over 1 million purposes for the service as of 30 June 2020. However, knowledge utilization is capped at 5GB when roaming in areas the place Rakuten has not but constructed out its personal community and depends as a substitute on KDDI’s community (i.e., areas exterior sure main metropolitan areas like Tokyo, Nagoya and Osaka). Furthermore, Rakuten has solely launched its 5G community in round 20 locales, which is restricted in comparison with the opposite MNO suppliers.

Public Wi-Fi access

According to a 2017 survey of international guests performed by the Japan Tourism Agency, the shortage of free public Wi-Fi in Japan was ranked the third most inconvenient facet of their go to to Japan.

The MIC has been planning and implementing enhancements to public Wi-Fi providers in an effort to extend the variety of international guests to Japan. In explicit, the MIC has been managing the implementation of the SAQ2 JAPAN Project6 since June 2014. The objectives of the SAQ2 JAPAN Project embody:

  1. rising the variety of free Wi-Fi hotspots and bettering the accessibility of those hotspots to the general public;
  2. facilitating the provision and set up of Japanese SIM playing cards for international cell phone customers in Japan;
  3. lowering worldwide roaming charges relevant to international cell phone customers in Japan; and
  4. implementing multi-language interpretation techniques (i.e., translation purposes).

In November 2013, an NTT group affiliate started offering a smartphone software referred to as Japan Connected-free Wi-Fi, which permits customers to hook up with roughly 190,000 public Wi-Fi access factors throughout Japan,7 together with these at airports, practice stations, comfort shops and vacationer spots, with a one-time new person registration. The smartphone software is offered in 16 languages, together with English, French, German, Spanish, Italian, Chinese, Korean, Thai and Bahasa Indonesia.8 This NTT group affiliate additionally continues to put in extra Wi-Fi access factors.

In preparation for internet hosting the Olympic Games in Tokyo that have been initially scheduled to happen in 2020, in February 2016 the MIC issued a coverage assertion encouraging the adoption of a simplified and unified authentication protocol with the objective of accelerating international guests’ access to free public Wi-Fi providers. In furtherance of this objective, the MIC is conducting subject assessments to show the workability of a unified authentication protocol utilizing smartphone purposes and is disseminating this protocol to native municipalities to help in the revitalisation of native economies via elevated tourism. On behalf of the MIC, Gateway App Japan, a non-profit organisation, publishes a smartphone software referred to as the Omotenashi app9 with the cooperation of KDDI and SoftBank, the first opponents of the NTT group. It has but to be determined whether or not the 2 smartphone purposes (Japan Connected-free Wi-Fi and the Omotenashi app) will probably be consolidated or made appropriate. Recently, a handful of personal corporations, comparable to Accenture and SoftBank, have launched first-party purposes enabling international guests to access hundreds of Wi-Fi access factors throughout Japan. With customers’ consent, a few of these personal corporations collect anonymised knowledge from using their purposes, together with knowledge person attributes and location historical past, which they then analyse and promote to 3rd events as stories.

Tokyo Metro, a railway firm owned by the Japanese nationwide and native Tokyo governments that operates lots of the subway traces in Tokyo, supplies public Wi-Fi access factors at almost all stations. In 2017, Tokyo Metro introduced that it might equip the entire subway trains it operates with Wi-Fi by 2020. Both Japan Connected-free Wi-Fi and Travel Japan Wi-Fi will probably be out there on these trains.

In January 2019, the federal government started imposing a ¥1,000 departure tax, informally generally known as the ‘worldwide vacationer tax’, on all international guests to enhance Japan’s tourism infrastructure, together with via the proliferation and enhancement of public Wi-Fi.

Separately from the above enhancements to free Wi-Fi providers, main Japanese cell phone service suppliers have established an emergency catastrophe service set identifier (SSID): 00000JAPAN. This SSID allows every Wi-Fi person to make use of all Japanese cell service suppliers’ Wi-Fi networks throughout pure disasters whatever the supplier to which they’re subscribed.10 This SSID was made out there for the primary time throughout a two-week interval following an earthquake in the Kumamoto space in April 2016. More lately, this SSID was activated following flood disasters in the Hiroshima and Osaka areas in July 2018 and September 2018, respectively, in addition to following a big earthquake in Hokkaido in September 2018, and extreme typhoons in the course of the fall of 2019. During the 2018 Hokkaido earthquake, nonetheless, the Wi-Fi access factors have been rendered unusable as a result of widespread electrical outages. In gentle of rising safety and privateness issues, the MIC lately warned that communications despatched via this SSID are deliberately unencrypted to prioritise accessibility, and subsequently topic to interception by third events.

Use of international cell units

As a basic rule, it’s prohibited to make use of cell units in Japan that don’t meet Japanese radio wave emission requirements, and with respect to which the producer has not obtained authentication from the federal government. Therefore, till comparatively lately, many international guests’ use of their private cell units in Japan was technically unlawful, though there are not any recognized instances of any international customer being charged with Radio Act violations for private cell machine use. In August 2016, an modification to the Radio Act took impact, allowing international guests to Japan to make use of their private cell units (even when not authenticated in Japan) for as much as 90 days, as long as the units have both been licensed by the Federal Communications Commission in the United States or obtained CE certification in the European Economic Area utilizing requirements equal to these imposed upon Japanese expertise. This Radio Act modification was applied to encourage international vacationers to go to Japan in anticipation of the Olympic Games initially scheduled to happen in 2020. While there had beforehand been issues that units not authenticated in Japan may adversely have an effect on the radio use setting, the MIC finally concluded that the probability of any hostile impact was minimal. The MIC additional loosened the restrictions to permit Japanese residents to make use of international cell phones for R&D functions through an modification to the Radio Act. Under the amended Radio Act, which got here into pressure in pressure in November 2019, Japanese residents are permitted to make use of international cell phones for R&D functions for as much as 180 days, although the person is required to file a previous notification with the MIC and this exception solely permits customers to attach units which have obtained sure international certifications to Wi-Fi or Bluetooth.

In addition to government-imposed restrictions, personal corporations in Japan have in sure instances voluntarily adopted insurance policies prohibiting the sale of sure international cell units. In May 2019, for instance, NTT DOCOMO, KDDI and Softbank voluntarily ceased distribution of cell units manufactured by Huawai after sanctions have been imposed upon it by the United States. These carriers finally resumed gross sales of Huawei units after the US authorities introduced it was extending the pre-‘ban’ grace interval.

Proliferation of the IoT

To deal with the speedy improve in the variety of IoT units, which may exhaust the variety of out there cell phone numbers, the MIC in January 2017 amended its rules on the task of cellphone numbers to assign the designation ‘020’ to M2M knowledge connection units, protecting them separated from commonplace cell numbers designated with ‘090’, ‘080’ and ‘070’. It is anticipated that M2M knowledge connections performed via cell networks will initially be used primarily for telemeters (e.g., distant administration of water and gasoline meters, merchandising machines and elevators) and telematics (e.g., GPS and different data providers geared up in autos) and will finally cowl related vehicles and different IoT units. NTT DOCOMO, KDDI and a number of MVNOs commercially launched M2M knowledge connection providers in October 2017.

New rules have lately been adopted to handle IoT units’ vulnerability to cybercrime (see the ‘Cybercrime’ part under).

IP community

In November 2015, NTT introduced a plan to modify from using fixed-line PSTN to IP telephony. According to NTT’s up to date implementation plan, NTT will begin work on the change to IP telephony in January 2024 with deliberate completion in January 2025. As the prevailing PSTN is a basic telecommunications infrastructure, the MIC is paying shut consideration to what sort of IP telephony will emerge in addition to the method via which NTT will transition away from PSTN. In gentle of the significance of PSTN to the prevailing infrastructure, in February 2016 the MIC requested the Telecommunication Council to establish potential points that might come up from the change to IP telephony. To mitigate sure issues recognized by the Council (comparable to shoppers’ capacity to retain present phone numbers), the MIC introduced a proposed modification to the Telecommunications Business Act to the Diet in March 2018, which was subsequently enacted in May 2018. Under the proposed modification, every telecommunication firm should receive the MIC’s approval of its plans relating to using phone numbers, and should thereafter adjust to the accredited plans. Additionally, when telecommunication corporations stop to offer providers in the course of the shift to IP telephony, these corporations should file discover of such cessation with the MIC in order that the MIC might make a public announcement of the terminating providers to clients.

iii Restrictions on the supply of service

The telecommunications business in Japan has historically been dominated by NTT East and NTT West and by three main personal telecommunication corporations: NTT DOCOMO, KDDI and SoftBank. A fourth main service supplier, Rakuten Mobile, was granted an MNO enterprise licence in April 2018 and launched industrial MNO providers in April 2020. Because present suppliers can grow to be dominant to the exclusion of recent entrants as soon as their community or expertise commonplace has been adopted by a crucial mass of customers, the MIC and the Japan Fair Trade Commission (JFTC) have collectively adopted pointers to control anticompetitive practices by service suppliers with excessive market shares. For instance, the rules state that the JFTC may take corrective motion, comparable to issuing a stop and desist order, if a telecommunications service supplier with a excessive market share, comparable to a cell phone provider, have been to contractually limit its clients from switching to a different service supplier or to cost an extreme cancellation price for doing so.

Pricing restrictions

Under the Telecommunications Business Act, costs charged to finish customers by NTT East and NTT West for wired telephony and payphone providers are topic to caps to be decided by the MIC. These caps are meant to stop these corporations from abusing their near-monopoly over these basic providers and to encourage them to enhance effectivity. Prices to be charged by NTT East and NTT West for optical knowledge providers, and costs to be charged by KDDI, NTT DOCOMO and SoftBank for cell providers, should all be submitted to the MIC for overview earlier than implementation. If the MIC finds a pricing scheme inappropriate, both as a result of it’s anticompetitive or in any other case considerably unreasonable, the MIC might require the provider to vary its pricing scheme. Otherwise, costs charged to finish customers and the opposite phrases of service aren’t regulated. This might change, nonetheless, as the federal government has lately began making use of stress on the most important telecommunications corporations to scale back costs for cell phone providers.

As a basic rule, all telecommunication enterprise licence holders should present access to every other provider that seeks to interconnect with their community. However, the costs charged for, and the strategies of, interconnection have been areas of each public controversy and regulatory scrutiny. Telecommunications corporations have pressed for better access to NTT’s infrastructure, together with its optical fibre community. NTT solely supplied access to its fibre optic community on a bulk foundation till 1 February 2015, after which NTT East and NTT West respectively started to supply single-line fibre optic wholesale to different carriers, together with to non-traditional telecommunication corporations comparable to Sohgo Security Services (ALSOK) and Tsutaya, a rental video firm. These fibre optic wholesale programmes are designed to facilitate fibre optic use by lowering charges for fibre optic providers on the finish person degree. As of December 2018, roughly 751 operators had commenced use of those fibre optic wholesale providers.

Prior to the graduation of NTT’s fibre optic wholesale programme, there have been competition-related issues stemming from the confidential nature of NTT East’s and NTT West’s contracts with the secondary retailers to whom they supplied fibre optic wholesale providers. At the time, different main telecom service suppliers, comparable to KDDI and Softbank, expressed issues that NTT East and NTT West have been offering their fibre optic wholesale providers to NTT group corporations at decrease costs than to unaffiliated corporations, which in flip enabled NTT group corporations to offer fibre optic providers to finish customers at decrease costs. In response to those issues, the MIC issued pointers regarding the supply of fibre optic wholesale that prohibit the disparate therapy of choose service suppliers and additionally present the MIC with potential enforcement mechanisms. A survey performed by the MIC confirmed that NTT DOCOMO and NTT Communications (a knowledge communication firm inside the NTT group) obtained roughly 60 per cent of the fibre optic wholesale service market by providing massive price reductions on their respective cell providers to finish customers. Given the prominence of this market share, and as a result of their relationship to NTT East and NTT West, different fibre optic service suppliers have argued that the discounted charges charged by NTT DOCOMO and NTT Communications are anticompetitive in nature. To deal with these issues, the MIC determined in May 2016 to launch investigations into NTT DOCOMO’s enterprise practices. In its investigation report, which was issued in August 2018, the MIC concluded that the discounted charges charged by NTT DOCOMO and NTT Communications didn’t represent anticompetitive practices. However, the MIC did decide throughout its investigation that NTT DOCOMO’s on-line description of the phrases and situations relevant to its pricing low cost was deceptive to clients. NTT DOCOMO voluntarily modified this description, however in June 2018 the MIC nonetheless issued an administrative route to NTT DOCOMO to stop future occurrences of deceptive advertising.


Along with the introduction of fibre optic wholesale providers, the provision of cell line wholesale providers MVNOs in Japan has additionally begun to develop. While MVNOs have existed in Japan since 2001, till lately the variety of service suppliers and subscribers had been few in quantity. In 2007, the MIC’s pointers relating to MVNOs have been amended to make clear the relative rights and obligations between MVNOs and MNOs, and a formalised dispute settlement process was established. After this modification, the variety of MVNO service suppliers utilizing MNOs’ cell traces or WiMAX traces considerably elevated. In 2014, the rules for the operation of Type II designated telecommunication amenities have been amended, which included a change in the calculations for cell line wholesale pricing. These calculation modifications have diminished cell line wholesale costs to the good thing about MVNOs. More lately, in 2017 the rules relating to MVNOs have been amended twice to, amongst different issues, make clear that the MIC is authorised to challenge enterprise enchancment orders to MNOs who discriminate in opposition to MVNOs with respect to offering access to its community.11

The aforementioned guideline amendments have spawned a current improve in MVNO exercise. In FY 2013, solely 22 MVNOs supplied knowledge communication providers or voice communication providers in Japan. However, as of March 2020 the variety of lively MVNOs has elevated to 1,128. Correspondingly, there have been 24.65 million MVNO subscribers by March 2020, up from 7.17 million in December 2013. However, regardless of this current improve in MVNO exercise, MVNO service subscribers nonetheless solely constituted 13.2 per cent of all cell service subscribers as of March 2020.

Anticompetitive enterprise practices

One of the explanations MVNO penetration stays low stems from MNOs’ frequent observe of allowing subscribers to buy new cell units on month-to-month instalment plans – usually concurrently providing reductions on month-to-month subscription charges equal to or better than the quantity of such month-to-month instalment funds. MNOs promote that this instalment and low cost programme renders subscribers’ new units ‘successfully free’. In distinction, the overwhelming majority of MVNOs wouldn’t have the monetary assets to allow subscribers to pay for brand new cell units in instalments. Instead, MVNO subscribers in search of a brand new cell machine should usually pay its whole buy worth upfront. This useful resource disparity has made it tough for MVNOs to compete with MNOs for brand new subscribers.

Recognising the excessive obstacles to entry created by these ‘successfully free’ cell machine programmes, in March 2016 the MIC issued pointers compelling MNOs to lower the scale of their cell machine reductions in order that subscribers are required to make cheap funds towards their new units. The meant results of these pointers is to bolster competitors and, finally, cut back cell service subscription charges. In October 2016, the MIC issued official warnings to NTT DOCOMO, KDDI and SoftBank for making an attempt to subvert the March 2016 amended pointers by distributing coupons to subscribers and potential subscribers in lieu of reductions.

The MIC has additionally made efforts to handle the problems of SIM locking and necessary two-year service contracts with computerized contract renewal, in every case to facilitate competitors between MNOs and MVNOs and cut back shoppers’ cell bills.

Since the MIC’s preliminary adoption of pointers in 2010, it has inspired cell service suppliers to offer SIM unlock choices for purchasers’ cell units, because it believes that the observe of SIM locking prevents shoppers from freely selecting cell service carriers and causes competitors stagnation. Following an August 2018 modification to the rules, cell service suppliers will probably be required to honour SIM unlock requests for all cell units efficient as of 1 September 2019, together with units bought on second-hand markets, aside from cell units for which the acquisition worth is being paid in instalments (in which case, SIM unlock requests should nonetheless be honoured beginning 100 days after the acquisition).

Until lately, there had been little progress towards the abolishment of mechanically renewing two-year service contracts. For years MNOs ceaselessly required clients having fun with the advantages of their ‘successfully free’ cell machine programmes to enter into two-year contracts beneath which clients have been required to pay roughly ¥10,000 for early termination, plus an accelerated fee of the acquisition worth of a smartphone that will in any other case be paid by instalments in the course of the two-year time period. The two-year contract system, in conjunction with the successfully free cell machine observe, has lengthy been recognized as lowering clients’ freedom of alternative in cell service carriers. Though the MIC issued pointers on quite a few events over time to handle these contracting practices, which it considered as elevating anticompetitive issues, the rules have been largely ineffective at addressing the basic challenge of mechanically renewing two-year contracts.

However, the Japanese authorities lastly took the subsequent step in May 2019 by legislatively imposing restrictions on using mechanically renewing two-year contracts via an modification to the Telecommunication Business Act – a considerably extra affirmative step than its prior non-binding pointers. As a basic precept, the newly amended Telecommunication Business Act prohibits using any contract provisions that will limit shoppers’ capacity to terminate their cell service contracts if the restrictions rise to a degree that will be deemed to have anticompetitive results. Given the generality, the MIC has been delegated the duty of adopting particular rules to hold out this mandate. The MIC has drafted proposed rules to make clear the forms of anticompetitive behaviour which might be prohibited beneath the amended Telecommunication Business Act, which have been reviewed by the Information & Communication Council and are in the method of being revised. The newest draft of the MIC’s proposed rules lists, amongst others, the next as examples of prohibited provisions in shoppers’ cell service contracts:

  1. any termination penalty (no matter quantity) in conjunction with a contract time period longer than two years;
  2. no matter contract size, any early termination penalty in extra of ¥1,000; and
  3. computerized renewal clauses coupled with an early termination price, whatever the preliminary contract time period, until the next situations are met:
    • the contract should be terminable with out a price throughout a minimal three-month window – extending from one month previous to expiry of the unique contract time period via the primary two months of the renewal interval;
    • shoppers should be given the selection, upon execution of the unique contract, to not have any termination penalty apply to renewal intervals;
    • shoppers should be given the selection, on the time of computerized renewal, to not have any termination penalty apply to that renewal interval; and
    • the service supplier can not change pricing or phrases to incentivise clients to consent to an extended termination penalty interval.

The MIC has additionally lately begun analysing the state of competitors between MVNOs. In explicit, the MIC has expressed issues that MNOs would possibly favour affiliated MVNOs and, in flip, discriminate in opposition to unaffiliated MVNOs by offering them slower knowledge visitors speeds. The MIC didn’t point out any MNOs by title, however many commentators imagine that the MIC was referring particularly to KDDI (with respect to UQ Communications, an MVNO that’s 32 per cent-owned by KDDI) and SoftBank (with respect to Y!Mobile, a low-cost cell service affiliated with SoftBank). In October 2018, the MIC established new rules prohibiting MNOs from discriminating between MVNOs with respect to knowledge visitors speeds.

Similar to the first cell service suppliers described above, the MIC has additionally lately expressed issues that the market shares of UQ Communications and Wireless City Planning (WCP) may allow them to stifle competitors by rejecting competitor MVNOs’ requests to hook up with their telecommunication amenities. In response, the MIC designated UQ Communications and WCP as ‘Type II designated telecommunication’ corporations efficient as of December 2019. This designation requires UQ Communications and WCP to every file with the MIC its respective phrases and situations relating to competitor MVNOs’ access to its telecommunication amenities.

In gentle of accelerating buyer complaints, efficient as of October 2018, the amended rules implementing the Telecommunication Business Act added MVNO voice communication providers to the listing of providers for which clients have an eight-day ‘cooling-off interval’ after signing a brand new service contract, throughout which the settlement could be terminated with out penalty.

The MIC additionally seeks to handle one other competitors challenge – the price of complying with the Telecommunication Business Act might differ between Japanese enterprises and international ones. The value distinction is primarily owing to the problem of extraterritorial enforcement of the act, ensuing in uneven enforcement between home and international enterprises. Under the present Telecommunication Business Act, a international firm will not be topic to extraterritorial enforcement until the corporate has an institution or a facility in Japan, even when it supplies providers to Japanese shoppers. To deal with this hole, the MIC amended the Telecommunication Business Act in May 2020 to increase its extraterritorial enforcement to international enterprises that present providers to Japanese clients which might be equal to these supplied by home enterprises which might be regulated by the Telecommunications Business Act. These amendments are anticipated to be in full pressure by May 2021. The amended Telecommunication Business Act requires such international telecommunication corporations to register with the MIC and to designate a neighborhood consultant in Japan to make sure that the MIC can realistically implement sanctions. This Amendment additionally goals to boost the safety of Japanese client’s privateness rights. As a consequence of extraterritorial software, even international telecommunication corporations should adjust to the duty to guard the patron’s proper to ‘secrecy of communication’, which is protected much more stringently than private knowledge beneath Privacy Act. However, international telecommunication corporations might face problem in complying with these ‘secrecy of communication’ necessities as a result of the rules don’t all the time clearly establish what classes of knowledge fall inside these necessities in the context of digital communication (which can embody header-data, IP addresses, location knowledge, and so forth.), regardless of the MIC’s issuing pointers that present some (incomplete) readability as to this challenge. Foreign telecommunication corporations ought to monitor how discussions develop with respect to understanding these necessities and the MIC will hopefully challenge additional pointers as advisable by Information and Communications Council.

Unsolicited communications

Separate rules exist in Japan proscribing unsolicited texts and emails and unsolicited cellphone calls. With respect to unsolicited texts and emails, the Act on Regulation of Transmission of Specified Electronic Mail prohibits:

  1. the transmission of emails utilizing false sender data as a method of commercial for the sender’s personal or one other particular person’s gross sales actions;
  2. the transmission of emails to individuals who haven’t opted in to obtain such specified emails; and
  3. even the place the recipient has opted in to obtain emails from the sender, the transmission of an unreasonably massive variety of emails for the aim of corroborating or selling the sender’s personal or one other particular person’s gross sales actions.

Violators of those prohibitions on unsolicited texts and emails might face penalties of as much as one 12 months’s imprisonment or a superb of as much as ¥1 million. Regulations pertaining to unsolicited cellphone calls are dealt with on the native prefectural degree. Accordingly, every native prefectural authorities has established a neighborhood ordinance prohibiting the making of unsolicited cellphone calls. For instance, in July 2018 the Metropolitan Government of Tokyo elevated penalties beneath an anti-nuisance ordinance prohibiting continued unsolicited cellphone calls, facsimiles, emails, and SNS messages, with offenders now being penalised with as much as one 12 months’s imprisonment or a superb of as much as ¥1 million.

As a results of a research performed by the Working Group on Consumer Protection Rules based mostly on the MIC’s assortment and evaluation of shoppers’ complaints tendencies the MIC has recognised that there are widespread client complaints about solicitations made by telecommunication enterprise suppliers that deliberately mislead shoppers as to the identification of such supplier or omit the aim of communication (e.g., to solicit clients to enter into subscription contracts they could not need). Some shoppers have been induced to enter into agreements with small-sized enterprises that misleadingly portrayed themselves as bigger, extra well-known enterprises, whereas others switched service suppliers beneath the mistaken perception that they have been simply switching to a unique subscription plan supplied by their present service supplier. To deal with these points, the MIC amended the Telecommunication Act to require telecommunication service suppliers and distributers to obviously state their identification and the aim of a communication prior to every communication for solicitation. The modification got here into full pressure and impact in October 2019.

iv SecurityProtection of private data

In protecting with Japan’s constitutional safety of freedom of speech and secrecy of communication, the Telecommunications Business Act prohibits ISPs from censoring or infringing on the privateness of communications passing via their networks.

As a basic matter, the Law Concerning the Protection of Personal Information (the Privacy Act) protects private data or knowledge that can be utilized to establish particular dwelling individuals. Under the Privacy Act, the entities dealing with such data are required to publish a ‘goal of utilisation’ relating to its use. Personal data integrated right into a database should be saved precisely, and crucial and correct measures to keep up its safety should be instituted. Any particular person whose private knowledge is saved in a database for greater than six months has a proper to request access to the information, and add to, modify or delete it. In August 2015, the Privacy Act was amended to strengthen the safety of private data, together with via expanded safety of delicate private data, restrictions on the switch of private data exterior Japan and the institution of protocols for using anonymised knowledge to facilitate large knowledge evaluation.

Further, the MIC has issued Privacy Act pointers which might be particular to telecommunications companies. As these pointers are structured to replicate the necessities beneath each the Privacy Act, which usually applies to all companies dealing with private data, and the Telecommunications Business Act, which supplies protections regarding the secrecy of communication (a constitutional proper), they’re thought-about much more stringent and sturdy than the Ministry of Economy, Trade and Industry pointers, which solely replicate Privacy Act rules. Under the MIC’s Privacy Act pointers, data associated to individuals making or receiving communications, comparable to their utilization historical past, identification and person location, might solely be disclosed to 3rd events in very restricted circumstances, comparable to pursuant to a search warrant. In addition, the MIC’s Privacy Act pointers have been amended on 2 November 2011, permitting telecommunications enterprise suppliers to offer a person’s locational data to 3rd events provided that they’ve the person’s consent, a search warrant or different legitimate justification; and to acquire a person’s locational data pursuant to regulation enforcement businesses’ requests provided that a warrant is issued. The MIC’s Privacy Act pointers additionally require telecommunications companies to determine inner rules relating to the size of time they could retain communication log data, and to delete this data after the expiry of such interval. In June 2015, the MIC amended the rules once more to set out a steered size of time throughout which communication log data could also be retained (six months to a 12 months, relying on the enterprise causes for retaining such data).

In response to amendments to the Privacy Act, the MIC, in April 2017, amended the rules to, amongst different issues, require telecommunications enterprise operators to publish privateness insurance policies relating to their assortment and use of personal data and, in explicit, the gathering of data via smartphone purposes. Telecommunications enterprise operators are notably prone to switch private knowledge throughout borders, which is topic to sure restrictions beneath the Privacy Act when a enterprise operator processing private knowledge in Japan transfers the information to 3rd events positioned in international nations. Even international companies (in a roundabout way processing private knowledge in Japan) ought to take note of the extraterritoriality of Japan’s knowledge privateness guidelines, which is triggered when the international enterprise collects private knowledge from a knowledge topic positioned in Japan when supplying items or rendering providers to her or him. In an effort to facilitate the worldwide alternate of data, in July 2018 the Personal Information Protection Committee and the Commissioner for Justice, Consumers and Gender Equality of the European Commission mutually recognised one another’s private knowledge safety regimes as equal. Beginning in January 2019, the restrictions on the cross-border switch of private knowledge between Japan and the EU have been exempted.

Further amendments to the Privacy Act have been handed in June 2020. The amendments pertain to varied issues, together with the enhancement of knowledge topic rights, narrowing the scope of permissible opt-out switch of private knowledge, creating a brand new class of ‘pseudonymised knowledge’ with much less cumbersome necessities, heightening submitting duties upon knowledge breach, strengthening extraterritorial enforcement, and so forth. Regulations implementing the brand new amendments and pointers are anticipated to make clear the way to handle day-to-day knowledge operation in compliance with the modification by round June 2022, at which period the modification is prone to come into full pressure and impact.

The Japan Fair Trade Committee (JFTC) has additionally approached private knowledge safety from the attitude of competitors regulation. In December 2019, the JFTC issued pointers on abuse of market dominance in the context of digital platforms gathering private knowledge from platform customers. This means that in the JFTC’s view, abuse of market dominance may happen in the business-to-consumer context, somewhat than solely in the business-to-business context. Whether a digital platform supplier has ‘market dominance’ is a fact-intensive inquiry. The JFTC pointers listing forms of behaviour constituting ‘abuse,’ which primarily encompass violations of the Privacy Act. However, it ought to be famous that the rules are non-exhaustive – different behaviour might represent ‘abuse’ even when it doesn’t violate the Privacy Act. Also, sure ‘abusive’ behaviour covers assortment of data which is said to an individual however not identifiable. Such unidentifiable data will not be protected by the Privacy Act, however the JFTC should still search to guard it.

At the identical time, in the furtherance of the Society 5.0 initiative, which will probably be facilitated by simpler knowledge circulation, the federal government has sought to determine techniques by which knowledge topics can present private knowledge in alternate for providers, whereas being protected in opposition to illegitimate use of such knowledge. As a end result, the non-public data financial institution (PIB) regime has been adopted. Under this regime, a PIB enters right into a contract with a knowledge topic beneath which the PIB is authorised to handle the information topic’s private knowledge, and when crucial, to gather private knowledge which the information topic already supplies to different corporations (comparable to e-commerce platform, SNS, and so forth.). When an organization wishes to make use of the non-public knowledge managed by the PIB, the PIB is authorised to find out whether or not to present the consent to such utilization on behalf of the information topic following the final coverage specified by the information topic. The knowledge topic additionally has the correct to opt-out of utilization. There are not any constraints on the sorts of advantages that could be provided to knowledge topics in alternate for access to their private knowledge. Accordingly, the PIB might supply advantages to incentivise the information topics to take part in its service.

A PIB will not be legally required to acquire any governmental licence to function its knowledge enterprise, however a PIB might receive certification from the Information Technology Federation of Japan (ITFJ) if desired, primarily to display the PIB is respected. The MIC and METI issued the most recent pointers setting forth the factors that an applicant should fulfill to acquire such certification in October 2019. As of April 2020, 5 PIBs have obtained the ITFJ certification and one PIB has launched knowledge providers.

Protection of digital platform customers

As illustrated by the JFTC’s strategy to digital platform operators’ assortment and processing of private knowledge, Japanese regulators have taken nice curiosity in defending customers (each of market contributors and clients). For this goal, the Ministry of Economy, Trade and Industry (METI), JFTC and MIC pushed for the Act For Transparency of Digital Platformer Transaction (the Platformer Act). The Platformer Act was enacted in June 2020, and is anticipated to be in full pressure round June 2021.

METI is anticipated to specify the digital platform companies that will probably be topic to the Platformer Act (specified platformer). The listing of specified platformers has not been launched, however international digital platform companies working in Japan are prone to be handled equally to Japanese digital platform companies as a result of officers of METI explicitly introduced that Platformer Act will apply to each international and home digital platform companies. Specified platformers will probably be topic to a few forms of obligations: (1) disclosure necessities; (2) necessities to determine procedures and constructions to successfully talk with market contributors and to deal with inquires and complaints from market contributors; and (3) necessities to submit annual stories to METI on the compliance standing and self-assessment thereof with respect to compliance with the necessities of (1) and (2). In order to adjust to the disclosure necessities, a specified platformer might have to disclose gadgets that aren’t included in typical phrases of use, together with the factors used to find out the rating of merchandise, and the factors for banning participation in a market.

Treatment of infringing content material

ISPs aren’t at the moment required to proactively delete content material that infringes upon the mental property rights or privateness of others. However, the Internet Provider Liability Limitation Act, enacted in 2001, supplies a secure harbour for ISPs that delete such content material. Under this secure harbour, no ISP could also be held responsible for the deletion of content material on its community if the ISP fairly believes that the content material infringes the mental property rights or privateness of others, or if a 3rd occasion alleges infringement and the content material sender doesn’t reply to the ISP’s inquiry inside seven days. The Internet Provider Liability Limitation Act additional shields ISPs from tortious legal responsibility for failing to delete infringing content material. In reliance on this statutory defence to legal responsibility, ISPs usually don’t take steps to watch the content material passing via their networks. The Act does, nonetheless, authorise individuals whose rights are infringed by content material delivered over the internet to demand data relating to the sender of the content material from ISPs in order that authorized motion could also be taken in opposition to the sender. However, as a sensible matter, it’s usually not doable to establish the unique sender of such infringing content material the place content material passes via a number of networks. In current years, the federal government has paid shut consideration to piracy points affecting Japanese companies, in explicit these piracy actions that focus on the forms of media related to its Cool Japan coverage (e.g., manga and animation).

In April 2018, the IPSHQ took what many considered to be an aggressive step by issuing a coverage referred to as Urgent Countermeasures in opposition to Piracy Sites directed at piracy points. Under this coverage, the IPSHQ declared that it’s acceptable for personal ISPs to voluntarily block access to a few main piracy web sites: Manga-mura, Anitube and Miomio. The coverage doesn’t legally oblige ISPs to dam access to those websites, however the IPSHQ nonetheless expects ISPs to voluntarily comply. Notably, there was robust backlash in opposition to the coverage from the Japan Internet Providers Association, which has argued that blocking access to those websites violates legal guidelines defending the secrecy of communications. According to the IPSHQ, the coverage is just a short lived measure meant to bridge the hole till the federal government passes extra everlasting laws regarding piracy web sites. The IPSHQ established a council of consultants for the aim of drafting such laws, and initially focused the issuance of an interim report in September 2018. However, there was robust disagreement among the many council’s members in regards to the legitimacy of blocking access to on-line content material, which led to a failure to fulfill the meant report timing. The closing assembly of the council in October 2018 ended with out a subsequent assembly being scheduled. According to stories, the council might discontinue additional discussions.

Although the IPSHQ didn’t attain a consensus, the ACA approached this challenge from the attitude of the Copyright Act and efficiently pushed for an modification thereto, whereby an operator of piracy websites is topic to a prison penalty of imprisonment as much as 5 years or fines of as much as ¥5 million or each, and an individual posting a hyperlink to infringing content material on a piracy web site is topic to imprisonment as much as three years or fines of as much as ¥3 million. In addition to the ban on piracy websites, the ACA addressed unlawful downloads of infringing content material. Before the modification, the statutory ban on unlawful downloads pertained solely to a restricted class of infringing contents: music and motion pictures. The amended Copyright Act will ban downloads of all of the classes of infringing contents, together with books, theses and pc applications. The ban on piracy websites will come into full pressure and impact on 1 October 2020. The extension of infringing content material classes come into full pressure and impact on 1 January 2021.

Protection of minors

A statute for the safety of minors from dangerous internet content material, generally known as the Youth Internet Environment Act, grew to become efficient in April 2009. The statute directs authorities our bodies to enhance internet security for juveniles (beneath the age of 18) by encouraging ISPs to make use of applied sciences that restrict juvenile access to dangerous content material. The statute targets content material glorifying crime or suicide, obscene sexual content material, and different depictions of maximum violence or cruelty. The statute additional exhorts mother and father to watch their kids’s internet use, and to restrict access to inappropriate content material by utilizing filtering software program and different measures.

The statute requires cell community service suppliers to filter internet content material for purchasers which might be juveniles, besides the place a mum or dad has expressly requested that filtering not be used. Under the Act, commencing in April 2010, producers of units with internet connectivity (aside from cell phones) grew to become required to pre-install filtering software program or in any other case facilitate using third-party filtering software program or providers. Initially, the Act didn’t impose any filtering-related requirement on cell phone use exterior the cell community (e.g., on Wi-Fi) partly as a result of only one.5 per cent of juveniles owned smartphones in 2010. However, as of 2017, 63.2 per cent of juveniles owned smartphones, and solely 44 per cent of these juvenile smartphone customers utilised filtering software program. This signifies that a big inhabitants of juveniles may have been uncovered, or a minimum of had access, to inappropriate content material in an unfiltered method. In June 2017, the Act was amended to incorporate smartphones inside the scope of cell community service suppliers’ obligations to filter internet content material and producers’ obligations to pre-install filtering software program. The amended Act additionally requires cell community service suppliers (i.e., MNOs and MVNOs) to substantiate whether or not every new subscriber is a juvenile, and in that case, to elucidate filtering to such juvenile and activate filtering. The amended Act grew to become efficient in February 2018.


In Japan, cybercrime has lengthy been an space of public concern. In current years, regulation enforcement has centered its efforts on combating cybercrime associated to pc hacking via the unauthorised use of IDs and passwords, and different assaults on safety holes; the distribution of pc viruses, and the enter of knowledge and unauthorised instructions that may trigger injury to computer systems and knowledge; and different forms of crimes facilitated via the internet, comparable to drug trafficking, prostitution, fraudulent internet auctions and little one pornography.

Combating the distribution of kid pornography has been an space of explicit scrutiny and public curiosity. The Act on Punishment of Activities Relating to Child Prostitution and Child Pornography and the Protection of Children, initially handed in 1999, prohibits the distribution of kid pornography. This Act was amended in 2004 to outlaw the importing and distribution of kid pornography over the internet, and was additional amended in 2014 to criminalise the easy possession of pornographic pictures that includes minors and to require ISPs to dam such pornographic materials.

To fight rising cybersecurity threats, the Basic Act on Cybersecurity was enacted in November 2014. The Act prescribes the idea of cybersecurity and defines the roles and tasks of the federal government. In January 2015, the Cybersecurity Strategic Headquarters (Headquarters) and National Center of Incident Readiness and Strategy for Cybersecurity have been established to facilitate programme planning, coverage formulation and total coordination for cross-cutting cybersecurity measures.

With respect to authorities authorities’ capacity to watch the content material of telecommunications, regulation enforcement authorities have been beforehand solely permitted to utilise wiretapping throughout prison investigations of organised crime for homicide, drug-related crimes, arms possession or stowaway smuggling by acquiring a wiretap warrant pursuant to the Act for Wiretapping for Criminal Investigation (Wiretapping Law). However, in April 2016, the Wiretapping Law was amended to allow wiretapping for use in prison investigations underlying a broader scope of organised crimes, together with these involving using explosive supplies, kidnapping, fraud, theft and little one pornography.

The MIC has expressed explicit issues that IoT units are susceptible to malware that might render them ‘zombies’ topic to manipulation by a cyber-attacker. The MIC has burdened that, to implement countermeasures in opposition to cyberattacks, it’s important to have particular data regarding the servers used for cyberattacks and contaminated networks. However, it was tough for telecommunications enterprise operators to share such data with each other in gentle of authorized obligations to guard the secrecy of communications beneath the Telecommunications Business Act. In May 2018, the Telecommunications Business Act was amended with the objective of creating a authorized framework to allow the sharing of data amongst telecommunications enterprise operators for cybersecurity functions. Under the amended Telecommunications Business Act, a third-party organisation designated by the MIC will act as a hub via which the related data will probably be shared amongst telecommunications enterprise operators with out violating the secrecy of communications. In January 2019, the MIC designated ICT-ISAC Japan, a cybersecurity analysis organisation, to behave because the third-party for these functions. In addition, the Act on National Institute of Information and Communications Technology (NICT) has been amended to authorise the NICT to evaluate networks and establish these missing acceptable password configurations. The NICT will establish the precise networks and convey the actual network-specific data to telecommunications enterprise operators through a delegated third-party organisation in order that they’ll warn community homeowners of any password configuration deficiencies. The NICT started working in February 2019 beneath the undertaking title ‘NOTICE’ (i.e., the National Operation Towards IoT Clean Environment). Following these cybersecurity developments, the Telecommunication Business Act was correspondingly amended in April 2019 so as to add new knowledge safety necessities to the technological specification requirement for IoT terminal tools.

This article is made out there by Latham & Watkins for instructional functions solely in addition to to present you basic data and a basic understanding of the regulation, to not present particular authorized recommendation. Your receipt of this communication alone creates no legal professional consumer relationship between you and Latham & Watkins. Any content material of this text shouldn’t be used as an alternative to competent authorized recommendation from a licensed skilled legal professional in your jurisdiction.

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