Both Apple and Google have announced significant changes to comply with the Mobile Software Competition Act (MSCA) in Japan. The two tech giants are among the designated companies by Japan"s Fair Trade Commission (JFTC) under the new act, which aims to curb dominance and monopolies in the Japanese smartphone market.
For starters, the tech giants will offer an alternative in-app billing system for developers and present user-choice screens for browsers and search engines, prompting Android and iOS users to choose their preferred option. The new MSCA changes are part of the iOS 26.2 update in Apple"s case.
Google has long allowed users to install third-party apps on their Android devices; however, some of Google"s recent actions were seen as a major blow to app sideloading. MSCA has opened the gates for iOS developers to distribute apps through alternative marketplaces and process app payments outside of Apple In-App Purchase.
This is in line with the EU"s Digital Markets Act, which forced Apple to allow app sideloading and third-party app stores in the region. However, both companies stressed that switching to third-party payment systems and marketplaces could introduce security risks, malware, fraud, scams, and privacy issues.
While the Cupertino giant is allowing authorized alternative app marketplaces, the apps published on these portals won"t go through the App Review process. Apple has introduced Notarization for iOS apps distributed outside of the App Store to help protect kids from inappropriate content and scams.
This notarization is a baseline review involving automated checks and human review "that applies to all iOS apps and focuses on basic functionality and protecting users from serious threats," Apple said.
The company added that it won"t be able process refunds for apps relying on alternative payment processing. A user"s App Store history will only show digital purchases and subscriptions made through Apple"s in-app purchase platform.
The iPhone-maker has prevented people from losing over $9 billion due to fraudulent transactions over the last five years and has rejected millions of app review submissions that fail to meet guidelines.
However, having tight control over the app ecosystem for one of the biggest smartphones on the market has its consequences. Time and again, Apple and Google face heat from app developers and competition authorities over app payment commissions and alleged monopolies.
That said, Apple will still charge developers a commission for apps on the App Store that use third-party payment systems or external websites. Similar is the case of Google, which will charge a Play Service Fees for external transactions.
Apple will charge a 5% Core Technology Commission (CTC) for apps distributed outside of the App Store "on the sale of digital goods and services, including paid apps." CTC differs slightly from the Core Technology Fee (CTF) that Apple has implemented in the EU.
You can read about Apple"s and Google"s MSCA changes in detail on their respective blogs.