Chapter 3. Japan

Since 2010, Japan’s Internet penetration has been hovering at around 80%, roughly the same level as the United States. While this means a large portion of a wealthy population has access to the Internet, it also means that Japan’s room for growth is limited. Statistically, Japan’s growth in terms of Internet users is under 10% annually, which is dwarfed by most other East Asian countries. Japan’s economic growth has slowed down, as with the other developed countries of the Eurozone, and so too has its growth in Internet usage. Nevertheless, the population that does have Internet access is extremely large, and therefore, Japan is a market that cannot be ignored.

Japan’s data privacy legislation is generally stricter than similar legislation in the United States—although perhaps it’s better described as more precise and well defined. Japan’s data privacy law comes in the form of the Protection of Personal Information Act. The law does not regulate data privacy directly so much as it empowers various ministries within the government to regulate different aspects of data privacy. Industries may fall under the jurisdiction of one or several ministries, and therefore business may be required to comply with multiple regulations and guidelines. Businesses dealing with personal information databases will be made to follow the specific guidelines within their respective industries. Personal information itself is defined broadly to include almost any information regarding an individual that may be used to identify, and a database is defined officially as any data set containing information from over 5,000 individuals. To maintain a database, a business will have to specify the purpose of collecting the data and remain within the scope of that purpose. The manner of obtaining is to be fair, data is to be kept adequately secure, and consent should be obtained before sharing the information.

Japan’s legal landscape regarding data privacy is different from that of the United States in that it favors a more opt-in approach than an opt-out approach. Consent must be obtained from individuals in Japan; in the United States, consent is taken to be implied if it is not denied. In terms of sectoral laws, there are further requirements depending on industry—some industries define certain procedures, including the appointment of data privacy officials and the requirement of internal inspections on data security practices; other industries maintain strict standards for data privacy that must be met, the method being left up to the business. Japan’s data privacy law also provides for specific and strict penalties—violations are met with fines and even imprisonment up to six months. Japan’s data privacy law does not distinguish between moving data inside and outside of Japan, which means that the law is relevant to businesses that are not primarily located in Japan. In practice and looking ahead to the future, the landscape is shifting to a more big data–friendly environment: it seems likely that Japan will attempt to revise its data privacy laws to accommodate for the increasingly large role that big data is playing.

Currently, big data already finds a home in many Japanese industries. Interestingly, the Japanese government itself is a huge player in the realm of big data. Japan’s central government has attempted to employ data on population movement, tax revenue information, and more in an attempt to aid local municipalities in economic revitalization. The use of big data as a tool to facilitate economic and political policy by the Japanese government also means that Japan has adopted an Open Data Initiative. The initiative is an attempt to make public certain data such that it can be used for secondary purposes—for profit or for public improvement, among other purposes. The Initiative attempts to create, first, transparency and confidence in the government. Second, the Initiative seeks to increase collaboration and participation from both public and private sectors. Third, the ultimate result is that the constant flow of data will facilitate economic growth and efficient government.

In fact, Japan and open data have a longer history than just government involvement. Even before the government’s movement toward open data, Japanese people have found uses for it. Most notably, open data facilitated the recovery from the 2011 earthquake—car GPS data was used to find drivable roads, electricity shortage data was made available to encourage energy saving, and websites (http://sinsai.info, for example) were created to allow users to share relevant information.

Japan is not the fastest-growing country in Asia. Japan is also not the country with the most room for growth. However, Japan is the largest developed Asian country in terms of Internet users, which means that Japan is a viable place to engage in the big data market. Primarily, Japan’s advantage over a less developed nation such as China is a government that maintains strict data privacy laws (which are likely to be altered) and seeks to promote the flow of open data. While China may be a country to look out for in the coming years, Japan is a great place to look now.