Key Takeaways 

• Japan’s APPI establishes a robust framework for data privacy, applying to any business, including non-profits, handling personal information of individuals in Japan, regardless of the business’s physical location. The APPI mandates comprehensive privacy notices, sets conditions for consent (especially for sensitive personal information), and imposes requirements on data transfers, particularly those involving third parties outside Japan. Individuals are granted significant rights, including access, correction, and deletion of their data, and businesses face substantial fines for non-compliance.
• Japan’s direct marketing laws require businesses to obtain informed and express consent from recipients before sending electronic marketing communications. The law also mandates easy opt-out mechanisms and imposes penalties for violations.
• Japan’s newly enacted Japan AI Act adopts a voluntary, best-practices approach rather than strict prescriptive rules. The law encourages industry self-regulation, transparency, accountability, and risk management, aiming to foster AI innovation while addressing societal concerns such as privacy, security, and ethics.
• Japan’s legal landscape for privacy and AI is complex and evolving, presenting considerable risks for businesses that do not carefully navigate their obligations. Non-compliance can result in legal penalties, reputational damage, and operational disruptions. Businesses operating in or targeting the Japanese market must stay vigilant and proactive in understanding and adhering to these regulations to maintain compliance and consumer trust.

Introduction 

Japan has emerged as a global leader in the regulation and promotion of data privacy and artificial intelligence, balancing innovation with robust legal safeguards. The country’s legal framework, anchored by the Act on the Protection of Personal Information (“APPI”), establishes comprehensive requirements for the handling of personal information, ensuring transparency, accountability, and respect for individual rights. In parallel, Japan’s forward-thinking approach to artificial intelligence is embodied in the recently enacted Act on the Promotion of Research and Development and the Utilization of AI-Related Technologies (“Japan AI Act”), which encourages responsible AI development through voluntary best practices and industry self-regulation. 

Japan’s robust consumer protection laws, which include strict restrictions on direct marketing, create a complex legal environment that businesses must carefully navigate to ensure compliance and maintain goodwill with Japanese consumers. 

This blog post is an installment in Reed Smith’s series examining the current state of data privacy laws in major jurisdictions across the United States and around the world. In this post, we will explore the key regulatory challenges and considerations presented by Japan’s data privacy and AI legal landscape.

APPI 

The Act on the Protection of Personal Information, APPI, is Japan’s comprehensive data protection law and, applies to individuals and entities that handle or process personal information in the course of business (APPI, Article 16(2)). The APPI covers all businesses that handle the personal information of individuals in Japan or that supply goods or services within Japan, regardless of whether the business is physically located in the country (APPI, Article 171). Under the APPI, personal information is defined broadly as information relating to a living individual, whether in electronic form or otherwise (APPI, Article 2(1)).  

Privacy notice and consent 

When collecting or processing personal information, controllers must inform individuals of the purposes for which their personal information is being collected or processed, typically through a privacy policy or notice (APPI, Article 21(1), (2)) (Note, the APPI does not use the term "controller"; instead, it uses the term business handling personal information. However, because these terms have substantially the same meaning, the term "controller" is used in this article in place of the APPI’s terminology). If the controller processes personal information within the scope necessary to achieve the purposes specified in the privacy notice, obtaining consent is not required (APPI, Article 18(1)). However, if the controller intends to process sensitive personal information, consent from the individual must be obtained (APPI, Article 20(2)) (Note, sensitive personal information under the APPI refers to information concerning an individual's race, creed, social status, medical history, criminal record, or other details that could result in unjust discrimination (APPI Article 2(3)). 

Transfers to third parties 

The APPI permits the transfer of personal information to third parties under various circumstances, including when the individual has provided consent or when notification is made to the Japanese government (APPI, Article 27(1),(2)). However, the APPI also provides exceptions to these requirements in certain situations. One of the most common types of transfers for businesses is the transfer of personal information to a service provider or processor. The APPI allows such transfers if the processing is necessary to achieve the purposes specified at the time of collection (APPI, Article 27(5)(i)).

A common type of data transfer for a business involves the internal transfer of personal information, such as when personal information collected by a Japanese subsidiary is shared with its parent company in the United States.  The APPI permits these intra-company transfers if specific conditions are met, such as providing key information to individuals prior to the transfer and establishing internal measures to ensure the protection of personal information (APPI, Article 27(5)(iii)).

Similar to other global privacy laws, the APPI imposes additional restrictions on cross-border transfers of personal information to third parties located outside of Japan. Consent is one mechanism that enables cross-border data transfers under the APPI (APPI, Article 28(1)).  However, if the controller ensures that the recipient outside Japan implements security and privacy measures equivalent to those required by the APPI, consent is not required (APPI, Article 28(1)). In these cases, the controller must take ongoing steps to verify that the third party continues to meet these requirements and must provide relevant information to individuals upon request (APPI, Article 28(3) (While the APPI imposes additional restrictions on data transfers, such as requirements to report certain transfers to relevant governmental authorities, these restrictions do not apply to transfers made under Article 27(5), including transfers to data processors and intra-company data transfers (see APPI, Articles 29 and 30)).

Data subject rights 

The APPI, similar to privacy laws in the United States and the European Union, provides individuals with several rights regarding their personal information. Under the APPI, individuals may:

• Request information about the controller, such as the identity and contact details of the business handling their personal information (APPI, Article 32). 
• Access personal information that the controller holds about them (right of access) (APPI, Article 33(1)).
• Request correction of any inaccurate personal information held by the controller (right to correct) (APPI, Article 34(1)).
• Request that the business cease using their personal information (object to processing) (APPI, Article 35(1)).
• Request that the controller delete personal information (right to delete)  (APPI, Article 35(1)).

Fines  

The APPI imposes financial penalties for violations, with the maximum fine for businesses set at 100 million yen (approx. USD $680,000) (APPI, Article 184(1)(i)). The actual amount may vary depending on the nature and severity of the violation. 

In addition, the APPI establishes a private right of action, enabling individuals whose rights have been violated to pursue legal remedies directly against businesses. Although there is no single article that explicitly outlines a private right of action, the cumulative provisions and enforcement mechanisms of the APPI effectively grant individuals the ability to seek legal redress for violations of the Act. This framework allows individuals to pursue remedies through the legal system when their rights under the APPI have been infringed. This means that affected individuals may bring claims in court to seek compensation or other relief for breaches of the APPI by businesses handling their personal information.

Direct marketing 

The Act on Regulation of Transmission of Specified Electronic Mail (Act No. 26 of April 17 2022) (“ACPT”) regulates direct marketing in Japan. Under applicable law and guidance, consent is required from the recipient of the electronic communication (Guidelines Concerning the Transmission, Etc., of Specific Electronic Mail, August 2011, (2)(1) Consent). Consent must be informed and the recipient must have given their express intent to consent to the electronic communication (Id. at (2)(1)(a), (b)). It should be noted that pre-checking a consent box may be permitted in some cases, depending on factors such as contents of the services (Id. at 7). As with other direct marketing laws, the sender of the electronic communication must provide an easy to use opt out mechanism for consumers to be able to decline future communications if they no long wish to (Id. at 4). Violations of direct marketing laws, including the ACPT, can range dramatically, including fines up to 300 million yen (approx. USD $2.04 million) (Act Against Unfair Premiums and Misrepresentation, Article 49).  

Artificial intelligence

On May 28, 2025, Japan’s Parliament enacted the country’s first comprehensive artificial intelligence law, the Japan AI Act. This legislation builds on the principles outlined in the 2024 AI White Paper, which set forth Japan’s ambition to become the world’s most AI-friendly nation (AI White Paper, 2024, “New Strategies in Stage II Toward the World’s Most AI-Friendly Country”, April 11, 2024). Rather than imposing strict, prescriptive rules, the Act encourages voluntary best practices and industry self-regulation, focusing on transparency, accountability, and risk management (Japan AI Law, Article 3). The law aims to foster AI advancement by supporting research, development, and international collaboration, while also addressing societal concerns such as privacy, security, and ethical considerations (Japan AI Law).

Conclusion 

Through comprehensive privacy laws such as the APPI, Japan establishes clear obligations for businesses to mitigate risks related to misuse, unauthorized access, and cross-border transfers of personal information. In the realm of artificial intelligence, the country’s flexible, innovation-first strategy is paired with a strong emphasis on transparency, accountability, and risk management, acknowledging the potential for AI to impact privacy, security, and ethical standards. As technology continues to evolve rapidly, Japan’s legal landscape presents significant risks for businesses that fail to carefully navigate the complex and evolving obligations imposed by Japanese privacy and AI laws, potentially exposing them to legal penalties, reputational harm, and operational disruptions. To address these challenges, businesses are encouraged to reach out to Reed Smith and leverage our established knowledge and connections with in-country counsel to help ensure compliance and effectively manage risk in this dynamic regulatory environment.