Inkopolitan Apartheid is a law imposed by the Inkopolis government which discriminated humans and non-cephalopod species with cephalopod species, though the law is strictly enforced to more on the humans and the Inklings. It references the apartheid period in South Africa from 1948 to 1994.
The law is seen in Meggy's Destiny: An SMG4 Movie.
It is unclear how the discrimination between humans and the majority Inkling race had begun. The law was probably enforced due to a natural belief between Inklings that humans love to eat squids, and as they are squids, this made many others to shrivel in fear, despite the fact the humans see them in inedible. To prevent any potential incident, their government had imposed a law that limited humans to do many certain things.
It is possible that the hatred of anime by its citizens is influenced by the law, and since most anime is based on humans, many started ridiculing it and those who are otakus, or anime lovers, which is the reason why Axol had to leave Inkopolis due to mass discrimination.
Due to the law, it is possible Meggy had to leave Inkopolis, later moving to the Mushroom Kingdom as a result in SMG4: Meggy Moves In.
The most common method of discrimination is by far putting a no human sign on any public or private property around the city. Whenever a human wants to go to any place owned by any cephalopod, they would be told that they would never be served, with several excuses to explain why (like how Crusty Sean said about health and safety regulations, despite the fact that the food looks edible to humans). Even so, arcades are Inkling-only, with humans never allowed to play any arcade game. However, humans are allowed to compete in splatfests, such as the Splat Squad team.
Anime is also discouraged throughout Inkopolis. Due to anime being based on human characters, Inkopolis citizens would feel very disgusted by it, and would discriminate those what is considered anime, and also otakus.