7 foreign IT companies face fines for not registering in Japan

The Justice Department eventually ran out of patience and ordered the courts to sanction seven foreign information technology companies for failing to show even a remote interest in registering in Japan.

The measure taken on July 1 was the first of its kind by the ministry.

Last December and again last March, the ministry notified 48 foreign IT companies that they were required to register under the Companies Act. The companies had sent notices to the Ministry of Communications saying they would be operating telecommunications companies in Japan, but never bothered to register.

Among them are the computer giants Google, Meta, operator of Facebook and Instagram, and Twitter.

Because all three companies had indicated their willingness to register, they were not among the seven to be fined.

The Company Law stipulates that foreign operators doing business in Japan must register as foreign companies and appoint local representatives responsible for all operations in that country.

Of the first 48 companies invited to register, two have since closed shop in Japan.

Most of the others showed no sign of checking in, so the department sent out notices in June saying fines would be issued if they continued to ignore the request.

As of July 1, eight companies had either completed registration procedures or submitted an application. Thirty-one others said they were ready to follow suit. They are asked to register before 22 July.

The seven companies could each face a fine of up to 1 million yen ($7,400) for continuing to ignore repeated requests from the ministry.

The registration of foreign companies is intended to help victims of slander and other unsavory behavior disseminated on social networks.

Victims are required to provide company information to the courts to obtain the data on those spreading harmful gossip. But if a company is not registered in Japan, the individual faces a long and costly battle to solicit relevant information from the head office overseas.

(This article was written by Kosuke Tauchi and Ayumi Sugiyama.)

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