Japan's Cabinet has approved a bill designed to regulate tech giants to ensure fair competition in the smartphone business.

Leading tech companies including Apple and Google hold superior positions in the smartphone field. There has been concern that their market dominance could hamper new entries and lead to higher costs for businesses that use their services.

The bill endorsed on Friday would designate companies to be regulated in four areas: operating software, app stores, internet browsers, and search engines.

The proposed legislation would define the practices that hinder competition and require banning.

The designated firms would be prohibited from obstructing the use of rivals' app stores and payment services.

They would also be banned from conducting discriminatory transactions with business partners.

The companies would be required to submit an annual report on their compliance with the regulations.

Violators would face penalties worth 20 percent of their sales in Japan -- more than triple the fine for obstructing another firm's business under the existing antitrust law. For repeat offenders, the penalty would be raised to 30 percent.

The government plans to seek enactment of the bill during the current Diet session, set to run until late June.