Japan government advisory panel says Apple, Google hinder app competition

September 14, 2016 6:27 PM EDT

An Android mascot is seen in front of a displayed logo of Apple in this photo illustration taken in Zenica, Bosnia and Herzegovina, May 5, 2015. REUTERS/Dado Ruvic

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By Stanley White

TOKYO (Reuters) - Apple Inc and Alphabet Inc's Google engage in practices that undermine competition in the smartphone app market, an advisory panel to Japan's Ministry of Economy, Trade and Industry alleged on Thursday.

Two of the practices it identified, restricting payment methods developers can accept and preventing the use of virtual currencies between apps, could violate Japan's anti-monopoly law, the advisory panel said in a report.

"We should monitor the situation," the report said. "If the competition regulator judges certain actions to be illegal, they should take firm legal measures in response."

Apple and Google officials were not immediately available for comment.

Anti-trust violations have become a sensitive issue for U.S. technology companies after the European Union accused Google in April of using its Android mobile operating system to block competitors, which could carry a fine of up to $7.4 billion.

The METI panel report looked at how the two U.S. technology giants, as well as others that control platforms through which smartphone applications are sold, use their positions of power to decide what app developers can and cannot do.

Japan's government has placed renewed focus on the technology industry after Prime Minister Shinzo Abe made investment in cutting edge technology a central part of his economic growth strategy.

(Reporting by Stanley White and Makiko Yamazaki in Tokyo, with Aishwarya Venugopal in Bengaluru; Editing by Christian Schmollinger)

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