Japan's Fair Trade Commission said on November 4 that it has begun investigating how municipal governments deal with the IT vendors that build and run their administrative systems, after complaints that switching vendors brings steep data-migration charges. The commission will survey municipalities nationwide and interview vendors to see whether any of it raises problems under the Antimonopoly Act.
Local governments across Japan are in the middle of standardizing systems that handle duties such as the resident registry and the national pension. Each municipality used to run its own setup, but the cost of maintaining those systems and of rewriting them whenever the rules changed became a burden.
A standardization law passed in 2021 made the move mandatory, requiring municipalities to adopt systems built to specifications set by the national government.
Savings promised, costs rising
The government initially stressed that standardization, combined with the cloud environment it is building, would cut operating costs by 30%. In practice, municipality after municipality has ended up spending more.
The commission has not said how many complaints it has received or which vendors are involved. It has not set a date for publishing its findings.