Careful approach needed to promote competition in app stores

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The Yomiuri Shimbun
Shigeru Kitamura

The government has produced a report on the need to promote competition in app markets amid concerns about the influence of IT giants on these platforms. Shigeru Kitamura, former Secretary General of the National Security Secretariat, outlines some of the challenges ahead from an economic security perspective.

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A report by the Government’s Digital Marketplace Competition Council in April pointed to the fact that some smartphone apps are uncompetitive.

The report states that some operating system developers only allow apps to be downloaded from their own app stores.

The report considered this issue as it results in entry restrictions for app developers, who may have to pay high fees to operating system companies to market products in their app stores.

For this reason, the report refers to the need to allow “sideloading”, whereby users can download apps from sources other than the app store designated by their operating systems.

While it is true that the promotion of competition contributes to economic revitalization, if unrestricted competition affects the security of the nation and the safety of citizens, it cannot be ignored.

Careful consideration is needed regarding the relaxation of sideloading rules, as security vulnerabilities would increase if major operating system companies allow users to download applications that have not been preselected.

Meta Platforms Inc., formerly known as Facebook Inc, announced in October that it had detected more than 400 types of malicious software, or malware, designed to steal Facebook passwords and other information.

Even though operating system developers are on the lookout for dangerous applications, they are unable to prevent the spread of malware.

An example of malware includes FakeSpy, whose user interface resembles digital application forms from Japan Post and other transportation service providers. When users install the software, their data is stolen. A Chinese cybercrime group is believed to be behind the malware.

There is also malware that has been designed to look like a Health Canada coronavirus contact verification app. When victims download the malware from a fake government site, the data on their device is encrypted and a ransom is demanded in exchange for its removal. Ransomware can be used to target specific groups of people and their health data can be collected and exploited.

It is well known that Uyghurs are monitored using spyware implanted on their devices. “The China Freedom Trap” is spyware disguised as an e-book that, once downloaded, turns a user’s device into a sophisticated information-gathering terminal.

The spyware, which can operate a device’s camera and take screenshots, is believed to be widely used to monitor and track Uyghurs.

If app sideloading is promoted solely from a competitive perspective without considering these realities, apps created in countries where security is an issue could end up on smartphones in Japan, and information could be extracted.

In an emergency, the theft of data from key decision makers would pose a major threat to the nation, and lives could be at risk if dignitaries’ whereabouts information fell into the wrong hands.

Cooperation between government and the private sector is essential to minimize risk.

A large number of applications are developed and sold every day on the application markets. It is not practical for the government to check them all in advance. How OS companies and government can share the role will be a key question.

It is hoped that a policy will be implemented that strikes a balance between competition and economic security, taking full account of the difficult security environment.

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