By ByteBot
On December 17, Apple opened its App Store in Japan to third-party marketplaces and payment systems, making Japan the 29th country where iOS users can install apps outside Apple’s ecosystem. The changes comply with Japan’s Mobile Software Competition Act, which took effect December 18. Hours later, Epic Games CEO Tim Sweeney announced Fortnite would not return to iOS in Japan, calling Apple’s 21% fee on third-party payments “competition-crushing.” Is opening the platform enough if the fees remain prohibitively high?
Why Epic’s Rejection Matters
Epic fought Apple for five years for this moment. Japan’s law was designed to break platform monopolies and give developers choice. Yet Epic is walking away because the economics don’t work.
Apple charges 21% on third-party in-app purchases and 15% on web purchases—compared to the standard 30% App Store fee. That’s only a 9% savings. Epic’s position: the reduction isn’t worth managing payment infrastructure independently.
Tim Sweeney called it “another travesty of obstruction and lawbreaking in gross disrespect to the government and people of Japan.” Does a 21% fee comply with the law’s spirit, or just the letter?
In April 2025, a U.S. court ruled Apple’s 27% external payment fee “prohibitive.” Japan’s 21% is lower, but Epic argues it’s still too high. Where’s the line between compliance and malicious compliance?
What Actually Changed
Third-party app marketplaces are now allowed via iOS 26.2. AltStore PAL launched in Japan on December 18—within hours of Apple’s announcement. Fortnite is available via AltStore, though Epic won’t officially support iOS in Japan.
Apple enabled alternative payment systems. Developers can offer in-app purchases through non-Apple processors or direct users to websites. But Apple still takes its cut: 21% on third-party in-app payments, 15% on web transactions, and 5% on purchases in third-party stores.
Japan also gets side button customization. iPhone users can replace Siri with Alexa or Google Gemini—a small but symbolic change.
The catch: all apps, even from third-party stores, must pass Apple’s notarization process. Apple maintains control over what gets distributed, even outside its own store.
Japan’s Regulatory Push
Japan’s Mobile Software Competition Act, enforced December 18, follows the EU’s Digital Markets Act but with narrower scope. The EU’s DMA covers social networks, advertising, and marketplaces; Japan’s law targets only mobile operating systems, app stores, browsers, and search engines.
The Japan Fair Trade Commission designated Apple and Google on March 31, 2025. The law requires third-party app stores, alternative payment systems, and choice screens for search engines and browsers.
The question is whether Apple’s fee structure undermines the law’s intent. If the 21% commission discourages developers from using alternatives, the regulation may succeed on paper while failing in practice.
The Bigger Picture
Japan is the 29th country to force Apple to allow third-party app stores, following 27 EU states and Brazil. South Korea passed a payment choice law in 2021. India is investigating Apple and Google. Regulators worldwide are chipping away at platform monopolies, country by country.
Apple’s strategy: comply with minimum requirements while maintaining revenue through fees. Epic’s strategy: refuse to participate unless fees are eliminated entirely.
Other developers haven’t announced their plans. Spotify, Netflix, and Match.com historically opposed App Store fees, but none have stated whether they’ll use Japan’s third-party payment options. Their decisions will determine whether Japan’s law works.
The irony is stark. Regulators force openness. Platforms comply but keep fees high. Developers don’t use the alternatives. The result: a regulatory win that delivers little practical change.
What Happens Next
The next three to six months will reveal whether Japan’s law works. Will major apps adopt third-party payments? Will the Japan Fair Trade Commission challenge Apple’s 21% fee?
Early signals are mixed. AltStore launched same-day, showing enthusiasm for alternatives. But Epic’s refusal suggests the economics don’t work for large developers.
Japan is Apple’s third-largest iPhone market. If Japan’s regulations force fee reductions, other countries will follow. If they fail to change developer behavior, platform power remains intact.
The battle over app store monopolies is far from over. Japan’s Mobile Software Competition Act is the latest front, but it won’t be the last.
