Regulatory Insights: Understanding Japan's E-Commerce Compliance and Data Protection Laws

あゆみ佐藤
Oct 28
4 min read

Introduction

Japan’s e-commerce (EC) market is projected to reach approximately 29 trillion yen by 2025, positioning it among the most mature markets in Asia. As the market expands, legal regulations have become increasingly stringent, requiring businesses to maintain a high level of compliance in consumer protection, data privacy, and tax obligations.

This column outlines the key regulatory frameworks governing e-commerce operations in Japan and highlights the latest trends. It also provides practical insights and recent case examples to help both domestic and international businesses succeed in the Japanese market.

1. Consumer Protection Regulations

Act on Specified Commercial Transactions

In Japan, e-commerce operators are legally required to disclose detailed information regarding sales terms, return policies, pricing, and advertising practices. For instance, businesses must establish mechanisms that allow consumers to easily request returns and must clearly specify the return conditions.

As of 2025, monitoring of false or misleading online advertisements has been intensified, with the Consumer Affairs Agency actively issuing warnings and administrative penalties against non-compliant businesses.

Product Labeling Regulations

Various product categories in Japan—such as food, supplements, cosmetics, medical devices, and electrical appliances—are subject to unique labeling and safety regulations, including:

Food Sanitation Act: Mandatory labeling of ingredients and allergens
Pharmaceuticals and Medical Devices Act (PMD Act): Restrictions on claims and mandatory Japanese labeling
Electrical Appliance and Material Safety Act (PSE Mark): Certification of compliance with national safety standards

Even products sold through cross-border e-commerce are subject to these regulations, and unauthorized sales may result in administrative sanctions. Establishing an authorized importer is often required.

2. Recent Developments in Taxation and Consumption Tax

Platform Taxation (Effective April 2025)

Starting in April 2025, Japan introduced a platform taxation system that applies to B2C digital services consumed within the country. Under this system, large online platforms are responsible for collecting and remitting consumption tax on behalf of foreign digital service providers.

This reform—targeting major players such as Apple, Google, and Amazon AWS—aims to ensure fair taxation across domestic and international entities.

Review of De Minimis Tax Exemptions

Japan is also reviewing its de minimis exemption, which had previously exempted low-value imports from taxation. Beginning in 2025, low-priced imported goods sold through cross-border EC are gradually becoming subject to tax. This measure aims to level the playing field for domestic businesses.

3. Act on the Protection of Personal Information (APPI) and Data Compliance

Overview of APPI

Japan’s Act on the Protection of Personal Information (APPI) provides the legal framework governing the collection, use, management, and sharing of personal data. Businesses must adhere to the following principles:

Prior notification of purpose of use and obtaining user consent
Implementation of appropriate data security measures
Systems to respond to data disclosure, correction, or deletion requests
Strict oversight of third-party contractors and data transfers

My Number Regulations

Enterprises handling Japan’s My Number (national ID) data are subject to particularly stringent compliance obligations, with heavier penalties for violations introduced in recent revisions.

4. Emerging Technologies and Legal Challenges in E-commerce

Electronic Signatures and Digital Contracts

Amendments to the Electronic Contract Act have facilitated the widespread adoption of electronic signatures and online contract formation in e-commerce. Businesses must implement adequate safeguards to ensure authenticity and prevent data tampering in electronic agreements.

Blockchain and NFT Regulations

In 2025, Japan’s Ministry of Economy, Trade and Industry (METI) issued revised interpretative guidelines clarifying the legal treatment of blockchain technologies and NFTs in e-commerce. The new framework addresses issues of ownership rights, intellectual property protection, and consumer safety, laying the foundation for future digital asset governance.

5. Case Studies and Corporate Compliance Measures

Rakuten Group

As Japan’s largest e-commerce conglomerate, Rakuten has established a comprehensive compliance structure. The company has strengthened internal audits on privacy protection, enhanced APPI-aligned privacy policies, and implemented rapid response systems for data breaches. Rigorous third-party API security reviews are also mandated.

Amazon Japan

To comply with the new platform taxation system, Amazon Japan launched a VAT payment proxy service for foreign sellers, working closely with Japan’s tax authorities to ensure compliance and transparency.

ZOZOTOWN

The fashion EC platform ZOZOTOWN enforces strict legal reviews of cosmetic product advertisements under the PMD Act, prohibiting unsubstantiated claims and ensuring compliance with Consumer Affairs Agency guidance.

6. Strengthening Cybersecurity and Consumer Protection

In 2024, Japan recorded credit card fraud losses exceeding 55.5 billion yen, marking an all-time high. As a result, cybersecurity and fraud prevention have become top priorities for EC businesses.

From 2025, METI mandated the adoption of 3D Secure 2.0 for all online retailers to bolster fraud detection and prevent unauthorized transactions.

7. Conclusion

E-commerce in Japan operates under a highly regulated environment, where compliance across consumer protection, data privacy, and taxation forms the foundation of business credibility and sustainable operations.

Understanding the latest 2025 legal reforms and building a robust compliance framework are essential for market success.

For overseas companies entering Japan, it is equally crucial to learn the distinct legal and cultural expectations and implement risk management strategies aligned with Japan’s unique regulatory landscape.