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Japan has officially joined the effort to regulate the Big Tech landscape through the Mobile Software Competition Act (MSCA). The law took effect on December 18, 2025, transforming the way in which mobile ecosystems function within Japan’s economy. Considering that this is the world’s fourth-largest economy, the importance of the Mobile Software Competition Act (MSCA) is undeniable.
What is the Mobile Software Competition Act (MSCA)?
The Mobile Software Competition Act (MSCA) is an ex-ante regulation. This means it sets proactive rules, focused on preventing anti-competitive behaviour. The MSCA tackles gatekeeping by dominant players in advance instead of punishing it after it happens.
Key Mandates for Apple and Google
The MSCA singles out the “designated providers”, meaning the providers that have over 40 million monthly users (expected to include Apple and Google in this category), who are now expected to comply with the following regulations:
Third-Party App Stores: Platforms must now permit users to download apps from alternative marketplaces.s my SaaS business profitable?
Alternative Payment Systems: Developers can use third-party billing systems, bypassing the standard 15–30% "platform tax.”
No Steering Ban: Platforms can no longer prevent developers from "steering" users to lower prices on external websites (D2C/App2Web).
Browser & Search Choice: Enhanced freedom for users to select non-default browsers and search engines.s my pricing strategy done right?
How is the Mobile Software Competition Act (MSCA) different?
It is true that we are witnessing a global trend of rising ex-ante regulations. Digital Markets Act (DMA) in Europe or the competition enforcement via CADE in Brazil are just two examples of regulations that are setting new game rules for Big Tech to ensure they don’t become monopolies.
However, the MSCA stands out through some unique characteristics:
The Japanese balance: While other acts favor openness, the MSCA puts a strong emphasis on security. In other words, the MSCA allows Apple and Google to restrict certain activities if they are able to demonstrate that these actions can impact cybersecurity, privacy, or youth protection.
Focus: MSCA is aimed strictly at smartphones, considering that this is the major urgency in their economy.
Direct Native Payments: MSCA specifically addresses "native payments"—allowing third-party resellers (like PayPro Global) to be embedded directly inside an app or game.
What does MSCA mean for Developers?
Software companies and game developers will most certainly find MSCA as a major profitability win. And here is why:
- Keeping more of their profit: App stores can take 15–30% store commission. Through the MSCA, developers can retain a larger revenue share.
- Control over user data: Developers can now own the customer relationship by utilizing third-party systems.
Additional Readings
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Final Thoughts
The MSCA is not just another regulatory hurdle for Apple and Google; it is much more than that. MSCA is an economical move, meant to open up the mobile landscape, jumpstart the local startup scene, and support them in competing within the industry.
FAQs
What is the Mobile Software Competition Act (MSCA)?
The Mobile Software Competition Act (MSCA) is a new Japanese law that serves as an "ex-ante" regulation, meaning it establishes proactive rules to prevent anti-competitive behavior before it occurs. It specifically targets "designated providers" (dominant tech giants like Apple and Google) to ensure fair competition within the mobile ecosystem.
When did Japan’s MSCA regulation come into effect?
The law officially took effect on December 18, 2025. This legislation marks a significant shift in Japan's digital economy—the fourth largest in the world—by mandating openness in mobile app marketplaces.
How does the MSCA change app billing and the "platform tax"?
Under the MSCA, developers are no longer forced to use the default payment systems of major app stores, which often charge a 15–30% commission. The act mandates that platforms allow Third-Party Billing, enabling developers to integrate alternative payment systems (such as PayPro Global) to retain a larger share of their revenue.
Is the MSCA part of the Japan AI regulation news today?
While much of the Japan AI regulation news today focuses on generative AI and data safety, the MSCA is a distinct piece of legislation focused strictly on the smartphone and mobile software ecosystem. However, both fall under the broader umbrella of Japan's recent initiatives to regulate Big Tech and ensure fair digital markets.
What are the key requirements for "Designated Providers" under MSCA?
Dominant platforms with over 40 million monthly users must comply with four main pillars:
- Third-Party App Stores: Allowing users to download apps from alternative marketplaces.
- Alternative Payment Systems: Permitting the use of third-party billing to bypass standard fees.
- No Steering Ban: Platforms cannot stop developers from directing users to external websites for lower prices (D2C).
- Browser & Search Choice: Giving users freedom to select non-default browsers and search engines.
Does the MSCA compromise user security for openness?
Unlike similar regulations like the European DMA, the MSCA uniquely balances openness with security. It allows platforms to restrict certain third-party activities if they can demonstrate that those actions would compromise cybersecurity, user privacy, or youth protection.
How does PayPro Global help developers comply with the MSCA?
PayPro Global’s checkout solution allows developers to take advantage of the MSCA's "native payments" provision. It offers a Branded Checkout that supports over 70 payment methods (including local Japanese options like JCB) and handles all Merchant of Record (MoR) responsibilities, including tax compliance, fraud protection, and GDPR requirements.
Ioana Grigorescu
Ioana Grigorescu is PayPro Global's Content Manager, focused on creating strategic writing pieces for SaaS, B2B, and technology companies. With a background that combines Languages and Translation Studies with Political Sciences, she's skilled in analyzing, creating, and communicating impactful content. She excels at developing content strategies, producing diverse marketing materials, and ensuring content effectiveness. Beyond her work, she enjoys exploring design with Figma.
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