Regulations On Single-Firm Conduct In JAPAN

Slide 1

Regulations on Single-Firm
Conduct in JAPAN

^{Hideo NAKAJIMA}
Deputy Secretary General
Japan Fair Trade Commission

September 12, 2006

Slide 2

Regulations on Single-Firm Conduct in Japan

Statutory Framework of
the Antimonopoly Act

1. Private Monopolization (Section 3)


2. No entrepreneur shall effect private monopolization

    

3. Unfair Trade Practices (Section 19)


4. No entrepreneur shall employ Unfair Trade Practices

    

Slide 3

Statutory Framework

Private Monopolization (1)

Business activities, by which any entrepreneur excludes or controls the business activities of other entrepreneurs, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade (Section 2)

Slide 4

Statutory Framework

Private Monopolization (2)

"Substantial restraint of competition"

A situation in which competition itself has significantly lessened and thereby a specific firm or firms can control the market by determining freely, to some extent, prices, qualities, volumes, and various other terms on its or their own volition

(December 9, 1953, Tokyo High Court)

Slide 5

Statutory Framework

Private Monopolization (3)

Measures against Private Monopolization

1. Administrative measures (JFTC)
   1. An order of elimination measures
      (= a cease and desist order)
   2. [ For controlling type of Private Monopolization]
      An order of surcharge payment
2. Criminal Sanction

Slide 6

Statutory Framework

Unfair Trade Practices (1)

Any act which tends to impede fair competition and which is designated by the Fair Trade Commission (Section 2 (9))
 

Slide 7

Statutory Framework

Unfair Trade Practices (2)

Measures against Unfair Trade Practices

An order of elimination measures
(= a cease and desist order) issued by the JFTC

Slide 8

Enforcement of Regulations on Single-Firm Conduct

Slide 9

Enforcement - Private Monopolization

Case 1: Paramount Bed Co., Ltd. (1998)

» Market on the hospital beds ordered by the Tokyo Metropolitan Gov.

» Paramount -- around 90% share in the market

1. Leading the procurement officials to craft tender specifications applicable only to its products
2. Controlling the activities of bid participants by designating a successful bidder and indicating bidding prices

Slide 10

Enforcement - Private Monopolization

Case 2: Hokkaido Shimbun Press (2000)

• Market on the daily newspaper in the Hakodate area

  Hokkaido Shimbun -- majority of general daily newspaper publications
  Hakodate Shimbun Press -- going to enter the market

1. Applying for trademark registration regarding nine mastheads
2. Soliciting Jiji Press not to deliver its articles to Hakodate Shimbun
3. Halving the prices of putting advertisement for SMEs in local areas

Slide 11

Enforcement - Unfair Trade Practices

(For determining whether any specific single-firm conduct falls under Unfair Trade Practices, or tends to impede fair competition)

< 1 >

» Various factors including the structure and development of the relevant market, the differences of the supply costs, market position of the concerned retailer, and subjective intentions for setting price differentials would need to be taken into accounts in a comprehensive way. (April 27, 2005, Tokyo High Court)

Slide 12

Enforcement - Unfair Trade Practices

(For determining whether any specific single-firm conduct falls under Unfair Trade Practices, or tends to impede fair competition)

< 2 >

» Those relevant factors such as intentions, objectives, and details of the concerned conduct, actual competitive relationship, and situations of the market should be taken into account in a comprehensive way (December 14, 1989, Supreme Court)

Slide 13

Enforcement - Unfair Trade Practices

Case 3: Microsoft KK (1998)

• Market for word processors
  MSKK -- Top market share for spreadsheet software c.f.) market for word processor / schedule management software

1. Making PC manufacturers preinstall both Excel and Word against their requests of preinstalling only Excels
2. Making PC manufacturers preinstall Outlook in addition to Excel and Word against their will

Slide 14

Discussion in the AMA Study Group

AMA Study Group

Issue related to single-firm conduct regulations