Regulating Digital Ads: Is a Global Approach the Way Forward for Japan and Other Advanced Economies?

This article addresses the problem of the regulation of digital advertising in Japan from a comparative and global perspective. There are a number of possible concerns about digital advertising, ranging from the lack of transparency of transactions and “unfair” conduct to conflicts of interest and self-preferencing by certain operators, from the way personal data are gathered and used to excessive concentration and market power in the supply chain. Several reports have been produced, including in the United Kingdom, in Australia, in Japan, and in a number of EU Member States. The European Commission’s proposals for a Digital Markets Act and for a Digital Services Act, if adopted, would introduce regulation that would also apply to online advertising. This paper examines the potential concerns that have been identified, focusing on the Interim Report by the Headquarters for Digital Market Competition of the Japanese Cabinet Office of Japan and comparing it to regulatory initiatives in the European Union and the United Kingdom. It concludes that an international approach should be adopted, with the right mix of Government intervention, under the aegis of institutions such as UNCTAD, UNCITRAL or the OECD, and Government-backed industry self-regulation. This is the only way to avoid regulatory unilateralism, which would fragment markets, hinder trade and ultimately harm business and consumers world-wide, depriving them of the benefits that the digital economy has already b