Japan: Transparency of Online Advertising Posting Standards

A report released by the Japan Fair Trade Commission on the 17th urges giant IT (information technology) companies to make the standards for posting online advertisements transparent. Competitors have questioned that they are giving preferential treatment to their services based on uncertain standards for huge IT that has multiple aspects such as advertising media and brokerage.

Giant IT sells spaces on SNS (exchange sites) that it operates as advertising media, and also handles the business of mediating companies that want to advertise there. Using the vast amount of personal data collected through search services and SNS, it makes a lot of money by delivering advertisements that match the tastes and interests of each consumer.

A report by the Japan Fair Trade Commission clarified that it could be a violation of the Antimonopoly Act if huge IT discontinues advertisement distribution for one-sided reasons or prevents other intermediaries from using it. It has been pointed out that it is difficult to understand the pricing and effects of advertisements, and the report stated that it is desirable to clarify the display standards and voluntarily disclose price information.

It is said that the more personal data is collected in online advertising, the more effective it is, and huge IT tends to be in an advantageous position for advertisers and consumers. The report also pointed out that the use of personal information obtained with ambiguous purposes for advertising may result in “abuse of dominant bargaining position” against consumers.

The report also goes into the impact of the giant IT advertising business on news media such as newspapers. “It is important to create an environment where the media that provide high-quality content is properly evaluated” (JFTC), and included recommendations for huge IT.

In Japan, news distribution services operated by Yahoo and LINE are increasing the number of users, and newspaper companies and others distribute articles to these sites to earn income. In a questionnaire to the media, there were complaints such as “The basis for determining the article distribution fee is unclear.” The FTC ordered that “it is desirable to clarify the standards and grounds.”

He also pointed out that if clicks lead to advertising revenue, it could lead to inviting access with exciting headlines and fake news. On the distribution site, we requested that the name of the media that provides the article be shown in an easy-to-understand manner, and that the articles to be posted at the top of the site be selected based on the accuracy and reliability of the content.

The government has been making regulations for huge IT since around 2018. On February 1, 2009, a new law under the jurisdiction of the Ministry of Economy, Trade and Industry was enforced, which requires the transparency of huge IT transactions. It targeted some industries such as large-scale online malls and app stores, but there is a possibility that such regulations will spread to online advertising in the future.

The issue was that it prioritized the supply of advertisements through its own trading market. The UK and Australia are investigating the oligopoly of the Internet advertising field, and the Japan Fair Trade Commission also exchanged opinions with the UK competition authorities and reflected them in the report.

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