ANTITRUST AND COMPETITION ISSUES IN JAPAN:
KOBAYASHI & TODO Q&A
TOSHIO Kobayashi of Tokyo-based Kobayashi & Todo Law Offices discusses antitrust and competition issues in Japan, and how they affect
both domestic and international clients
ANTITRUST ENFORCEMENT IN JAPAN HAS BEEN
CONSIDERED WEAK IN THE PAST. IS THIS STILL THE CASE,
AND IF SO, WHY?
To a certain extent, this is the case, although this is only
true for some aspects. Today, the Act is strongly
enforced in some types of unfair business practices, for
example, knock-out, resale price control or
unreasonable restriction on business trade. For
example, private suits for damages on the basis of
Antitrust Law have played little part as yet, even though
there have been few criminal actions against violators. I
think the reason is that the history of Japanese
antitrust practices is too short to penetrate the
business world , that is the Act was established in 1947
under American occupation and the conducting has
been mainly carried out by an administrative agency,
the Fair Trade Commission.
WHAT IS THE RELATIVE RATE OF ENFORCEMENT BY
JAPAN’S FAIR TRADE COMMISSION (JFTC)?
If a cartel or restrictive conduct by a trade association
is judged illegal by FTC, it charges the violating party an
administrative fee based on the following standard rate:
A; The total sales amount of the goods or services
handled by the violating party during the term of illegal
performance multiplied by the percentage rate settled
by the rule. B; The percentage above is differentiated by
industry, that is, in a big enterprise, it is 10% for
manufacturing industry, 3% for retail business, 2% for
wholesale business and in a medium and small sized
enterprise, 4% for manufacturing industry, 1.2% for
retail business, 1% for wholesale business. C; The
percentage rate is increased, decreased or exempted in
the following case; before the FTC started an
The present Japanese system is
similar to the US system. In
comparison, one problem lies in
the application of the system and
laws rather than system or laws
themselves. Another issue is that
members of the FTC are
government officials rather than
legal professionals.
investigation in the office of violating parties, if a party
applies its cartel or restrictive conduct to the FTC, the
first applier can get exemption, the second applier can
get 50% deduction and the third applier can get 30%
deduction; if the violating party ceases its violating
conduct in good time, the percentage rate above is
decreased 20%. If the violating party received the
administrative fee within the prior 10 years, the
percentage rate above is increased 50%.
DO YOU SEE THIS CHANGING IN THE SHORT-TERM FUTURE?
The only changes in the short -term future will be
minor.
HOW DOES THIS SYSTEM COMPARE WITH THE US SYSTEM?
IS IT SIGNIFICANTLY LESS PROLIFIC?
The present Japanese system is similar to the US
system. In comparison, one problem lies in the
