In-depth How Will Big Data Change Japan?
“Big Data” Raises Big Legal Questions in Japan

Sekiguchi Waichi [Profile]

[2014.11.28] Read in: 日本語 | ESPAÑOL |

A debate is going on now in Japan on how data amassed from consumers can be effectively used without infringing on individual privacy. This article looks at recent moves on the part of the government with regard to the rules for the use of this “big data.”

New IT Strategy Requires New Laws

The administration of Prime Minister Abe Shinzō is striving to implement a new IT strategy for its information and communications technology policies. Toward that end, the government’s Strategic Headquarters for the Promotion of an Advanced Information and Telecommunications Society, or IT Strategic Headquarters for short, has begun formulating the necessary new legislation. The IT strategy sets the goal of turning Japan into one of the world’s leading IT nations. It also calls for an “open data” strategy allowing government information to be used by the private sector as well as a “big data” strategy related to the use of the vast quantities of information arising from use of smartphones and other devices.

A key challenge in implementing these measures will be to maintain security and safeguard privacy. In order to address those issues, the government, led by the IT Strategic Headquarters, is drafting a revision of the Protection of Personal Information Act, or PIPA, to be submitted during the ordinary session of the Diet in 2015.

The Diet passed PIPA in 2003 as the first comprehensive law of its kind in Japan. Laws were in place prior to that to protect the digital data that government bodies held on individuals, but with the 2002 implementation of the Resident Basic Register Network System, which digitized the Basic Resident Registers of municipal governments nationwide, general rules were drawn up with regard to the protection of personal information. The rules were intended to allay privacy fears regarding the indications that the nationwide computer network to share data between government agencies, called “Jūki net,” was to be linked to a national identity numbering system with unique ID issued to citizens of Japan. The rules were meant to reassure the public that privacy would be fully safeguarded, thereby calming fears about private-sector usage of personal information.

Overheated Privacy Concerns

The fundamental idea behind PIPA is that no use of personal information will be made without prior notification to the individual involved and that the information will not be passed to a third party without permission. The law was said to be an application of the privacy protection systems introduced in Europe. A number of unforeseen problems arose after its implementation, though. Because of the extreme reaction on the part of both citizens and the business world, cases arose where apartment buildings and schools stopped listing the names of residents and students and hospitals stopped posting patient names outside hospital rooms.

In July 2014, a scandal emerged when personal information on elementary school children and their parents held by Benesse Corporation, a major correspondence education and publishing firm, was found to have leaked. In a sense, this scandal was the outcome of the inability to obtain information on students and their parents from Basic Resident Registers, thus leading to backdoor selling of information by name-list traders, who compile or obtain databases of personal information and sell it to marketers or other interested parties.

We can see, then, that although PIPA helped raise privacy awareness among Japanese citizens, the mistaken interpretations of the law and overzealous applications of it have unquestionably had a detrimental effect on economic activity and productivity.

Data Analysis Reaches New Heights

This is the context in which the debate over “big data” has emerged. The term was originally used during the era of mainframe computers to refer to a quantity of information that was too large to be processed. But with the recent advances in information technology, the term has come to refer to massive quantities of data that can be effectively analyzed to benefit society or economic activity. At the heart of this new trend is the emergence of new information technology capable of storing and sharing massive quantities of data via the Internet.

Particularly noteworthy are the parallel processing technologies MapReduce and Hadoop, developed by US-based IT giants Google and Yahoo, respectively. These technologies have made it possible to collect and analyze unstructured information, such as social-media and sensor data.

But the existence of PIPA has raised issues related to the use of this big data. The IT industry and other business sectors in Japan, like their counterparts in the United States, view the processing of big data as useful to economic activities, but current Japanese law does not allow for widespread use of the data. The move underway now to revise the law, led by the IT Strategic Headquarters, is an effort to bring it into line with the changes that have occurred over the past decade or so in the ways that personal information is being used.

The spread of new portable devices like smartphones has greatly expanded the “gray zone” of data beyond personal names and addresses, such as terminal IDs, email addresses, and face-recognition data. The task that the IT Strategic Headquarters has set itself is to determine what rules are needed to regulate the large-scale collection and diverse use of this information as big data.

Dissent from Corporate Leaders

In attempting to determine what new rules are needed, Japan’s IT Strategic Headquarters set up an expert committee that in June 2014 came up with an initial plan for future uses of personal data.

This proposal calls for creation of a system to determine how government bodies and companies can use personal information, based a new law that will regulate the gray zone of personal information other than names and addresses. This information falls into two categories, tentatively named “low personal specificity data,” which can be used without receiving permission as long as anonymity is maintained, and “semipersonal information,” which includes such information as terminal ID and facial recognition data.

Already, though, corporate leaders have begun to voice opposition to this proposal, including those in the Japan Association of New Economy, headed by Mikitani Hiroshi, the president and CEO of Rakuten Inc. These critics noted that the introduction of slapdash regulations in a sector characterized by rapid technical innovation could run counter to global business trends and hinder further innovation.

In the wake of this criticism, the IT Strategic Headquarters revised its initial proposal so that each industry would first voluntarily establish its own rules, after which a third-party body would gauge the suitability of the systems and standards proposed. This body was originally proposed to extend the operations of the Specific Personal Information Protection Commission, established at the time of the introduction of the “My Number” system that assigned each citizen a common number for social welfare and taxation procedures. This body is expected to take shape if legislators pass the amendment of the Act on the Protection of Personal Information.

  • [2014.11.28]

An editorial writer for the newspaper Nikkei, where he serves on its editorial and op-ed committees. Joined Nikkei Inc. after graduating from Hitotsubashi University in 1982. Was a Fulbright fellow at Harvard University from 1988 to 1989. Washington correspondent for Nikkei from 1990 to 1994. After heading the newspaper’s coverage of the electronics industry, he was appointed to the editorial committee in 1996 and in 2000 also became a member of the op-ed committee, mainly handling topics related to information and communication. Has been a part-time instructor at Hosei University Business School since 2006 and at the International University of Japan’s Center for Global Communications (GLOCOM) since 2008. Published works include Pasokon kakumei no kishu tachi (Flag Bearers of the PC Revolution; 2000) and Jōhō tansaku jutsu (Information Seeking Skills; 2006)

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