duced by information collection using smartphones and tablets commands a half of total private consumption.

### C. Examples of Internet Advertising for Consumption Promotion

Time spent on SNS and similar services through smartphones and tablets is longer than that through personal computers in teens. SNS and similar services are a charge-free communication tool for consumers while being established SNS and similar service as a business model for operators is based on data including users' action history and on advertising using such data.

SNS and similar service operators have gotten aware of users' respective ideas through their action trends. On the other hand, service providers willing to approach specific users can make advertisements focusing on users interested in their services through SNS and similar service operators. SNS and similar services enable one-

Figure 1-2-3-3 Amounts of consumption induced by information collection (by country, per month)

(Source) "Research on Present and Future of Smartphone Economy," MIC (2017)

to-one advertisements. By repeating customization to improve the accuracy, SNS and similar service operators can match supply and demand on a more real-time basis.

## Section 3 Online Platform and Data Utilization

Section 3 deals with online platforms and data utilization. Online platforms allow contents and applications service providers to have sites for reasonable Internet services to consumers, promoting innovation. Meanwhile, online platform operators have collected massive user data, leading ordinary consumers to become con-

### 1. Two Sides of Online Platform

## (1) Significances of Online Platforms

Sections 1 and 2 explained that various services including SNS, FinTech and sharing economy have emerged and been increasingly used on smartphones. Factors behind the phenomenon include the presence of platforms. Here, the two significances of online platforms are considered. The first significance is that online platforms make it easier for various applications and services to be generated $ ^{8} $ . If a business operator were to provide from applications to communication networks and terminals, it would have to make massive investment and consume much time for their development. If platforms exist and are available for connection, what any business operator must do can be limited to the provision of applications. Hurdles to business entry in this case may be lower than in the case for vertically integrated services, with more users being expected.

The second significance is that smartphones and their relevant services bridge between providers and users of goods and services and promote their matching. Their transactions are divided into four categories – business to business (B to B), business to business to consumer (B to B to C), business to consumer (B to C) and consumer to consumer (C to C) (Figure 1-3-1-1).

Among the four categories, particular attention may have to be paid to the B to B to C category including cerned over how such data would be used. If some companies prevent their rivals from using some online platforms, fairness may be called into question. If online platform servers are installed in foreign countries, cross-border data handling may become controversial.

what is called “two-sided market” because of its expected great influence on the future.

In the two-sided market, two groups of economic entities interact with each other through mediators and platforms. Specific examples include free-of-charge broadcasting backed by advertisement, information search services through the Internet and SNS. The reason for these services to have attracted attention regarding competition policy in recent years is that a party standing in a slight advantageous position over others in the initial stage can gain a dominant market size or share in later stages due to strong network effects (Figure 1-3-1-2). These services also match supply and demand through advertisement. Given that digitalization and data distribution growth can improve the accuracy of matching between supply and demand, data distribution growth apparently has further enhanced network effects in the two-sided market.

## (2) Challenges for Platforms

As described in (1), the unification of standards, though having some positive effects, can restrict competition by limiting the number of business operators, giving the disadvantage of consumers. Monopoly or oligopoly is apparently accompanied by the following adverse effects: