Japan to probe big AI firms for potential antimonopoly violations

Japan's primary antitrust regulator is preparing to investigate leading technology companies in the generative artificial intelligence sector for potential anticompetitive behavior, according to local media reports on Wednesday. The Japan Fair Trade Commission (JFTC) is set to scrutinize both domestic and foreign firms, including US giants and a prominent Japanese player, signaling heightened regulatory attention on the rapidly evolving AI market.

Scope of the Investigation: Search and Conversational AI

The investigation will encompass two primary categories of AI services, as reported by Kyodo News. The first includes companies offering AI-powered search engines, with US-based Google and Microsoft expected to come under review. The second category focuses on operators of advanced conversational AI systems, placing OpenAI, the creator of ChatGPT, and the newer platform Perplexity AI in the regulatory spotlight. The probe will also examine Japan's own LY Corporation, a major domestic internet services conglomerate.

Regulatory Stance: Understanding, Not a "Crackdown"

A senior official from the Japan Fair Trade Commission sought to frame the upcoming inquiry as an information-gathering exercise rather than a punitive action. Speaking to Nikkei Asia, the official stated, "The investigation is not intended as a crackdown, but rather to gain a better understanding of the situation." This suggests the initial phase will involve studying the business models, data practices, and market structures of these dominant AI firms to assess whether they are engaging in practices that unfairly stifle competition, such as creating exclusive data ecosystems or leveraging their size to disadvantage smaller rivals.

Context and Implications for the AI Industry

The regulatory move comes amid a global surge in antitrust scrutiny of Big Tech, now extending into the foundational layer of AI. It follows a recent, specific dispute where Kyodo News lodged a formal protest and demanded compensation from Perplexity AI for the alleged unauthorized use of its news articles—a case highlighting broader intellectual property and content sourcing concerns with AI models. Japan's proactive stance indicates that as AI becomes a critical economic and technological domain, regulators worldwide are preparing to apply existing competition laws to prevent market concentration and ensure a level playing field in this strategically vital industry.