From the enforcer: Fair Trade Commission
Japan: from the enforcer
Senior Deputy Secretary General
Director General of Investigation Bureau
|YAMAMOTO Takashi Commissioner||FUJIMOTO Tetsuya |
Senior Deputy Secretary General for Policy Management
|SHINAGAWA Takeshi |
Deputy Director General of Investigation Bureau
|MIMURA Akiko |
Deputy Secretary General for International Affairs
|SUGIYAMA Yukinari |
Deputy Director General of Investigation Bureau
|AOKI Reiko |
Director General of Economic Affairs Bureau
|SUWAZONO Sadaaki |
Director General of Criminal Investigation Department
|OJIMA Yoshiharu Commissioner||TANABE Osamu|
Director General of Trade Practices Department
Questions and answers
|1||Please provide the contact details of all major contacts at your agency, along with photographs.||Please see the table above.|
|2||How long is the head of agency’s term of office?||The Antimonopoly Act (AMA) provides that the term of office of the Chairman and the Commissioners shall be five years.|
Reappointment is allowed, but the Chairman and the Commissioners shall retire from the office upon reaching the age of 70 (article 30 of the AMA)
|3||When is he or she due for reappointment?||His term of office as chairman expires in March 2023.|
|4||Which posts within the organisation are political appointments?||The Chairman and Commissioners are appointed by the prime minister with the consent of both houses of the Diet. The appointment or dismissal of the Chairman is certified by the Emperor (article 29 of the AMA).|
|5||What is the agency’s annual budget?||The budget was ¥11.553 billion for the financial year of 2020 (April 2020 to March 2021).|
|6||How many staff are employed by the agency?||A total of 839 staff are working in the general secretariat of the Japan Fair Trade Commission (JFTC) (for financial year 2019). Despite the government policy of reducing costs, the total number of employees at the general secretariat has increased from 564 in financial year 2000 to 839 in financial year 2019. Approximately two- thirds of employees engage in investigation of anticompetitive activities, including merger review.|
|7||To whom does the head of the agency report?||Under article 44(1) of the AMA, the JFTC is required to submit to the Diet, through the Prime Minister, an annual report on enforcement of the AMA.|
Moreover, in accordance with article 44(2), the JFTC may submit to the Diet, through the Prime Minister, its opinions on matters necessary to achieve the purpose of the AMA.
|8||Do any industry-specific regulators have competition powers?||No industry-specific regulators have the authority to enforce the AMA.|
|9||If so, how do these relate to your agency’s role?||Not applicable.|
|10||May politicians overrule or disregard authority’s decisions? If they have ever exercised this right, describe the most recent example.||No. The AMA clearly stipulates that the Chairman and Commissioners of the JFTC shall perform their authority independently (article 28 of the AMA), and may not, against their will, be dismissed from office (article 31 of the AMA).|
|11||Does the law allow non-competition aims to be considered when your agency takes decisions?||The purpose of the AMA is ‘to promote fair and free competition, and thereby to promote democratic and wholesome development of the national economy as well as to assure the interests of general consumers’, by prohibiting private monopolisation, unreasonable restraint of trade and unfair trade practices (article 1 of the AMA). The latter objectives, ‘democratic and wholesome development of the national economy’ and assurance ‘of the interests of general consumers’, are regarded as ultimate goals pursued through promotion of ‘fair and free competition’. In addition, the AMA describes, for example, that private monopolisation and unreasonable restraint of trade are conducts substantially restraining competition in a particular field of trade contrary to the public interest that is defined in the Supreme Court decision of 1984 as, in principle, an economic environment with free competition. Accordingly, when determining illegality of conduct restraining competition, purposes other than promoting fair and free competition, such as protection of specific industries, for example, would never be considered.|
|12||Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this? Has any competition decision by the agency been overturned?||Administrative measures taken by the JFTC are subject to judicial review. Administrative review under the JFTC has been abolished by the 2013 AMA revision, which took effect in 2015. After the revision, those dissatisfied with the JFTC’s administrative measures may directly file a suit. At this point, only pending cases are still going through the administrative review pursuant to the by-laws of the said revision.|
In 2019, the Tokyo High Court held one judgment and the Supreme Court rendered seven dismissals or non-acceptances of final appeals under the previous track, in which the JFTC firstly reviews its administrative measure and judicial review would apply only after that. All of these judgements and dismissals or non-acceptance of final appeals stood by the JFTC’s review.
|13||Has the authority ever blocked a proposed merger? If yes, please provide the most recent instances.||As a result of review in 2016, the JFTC challenged the proposed merger of Lam Research Corporation/KLA-Tencor Corporation and the filing was abandoned.|
|14||Has the authority ever imposed conditions on a proposed merger? If yes, please provide the most recent instances.||In 2020, the parties in Z Holdings Corporation & LINE Corporation proposed remedial measures to resolve competitive concerns pointed out by the JFTC.|
|15||Has the authority conducted a phase two investigation in any of its merger filings? If yes, please provide the most recent instances.||The JFTC opened two Phase II investigations in 2020: The most recent one is DIC Corporation and BASF Colors & Effects Japan Ltd (BCE)|
|16||Has the authority ever pursued a company based outside your jurisdiction for a cartel offence? If yes, please provide the most recent instances.|
Since 2008, the JFTC has taken legal measures against foreign business entities involving in cartels; those entities are:
|17||Do you operate an immunity and leniency program? Whom should potential applicants contact? What discounts are available to companies that cooperate with cartel investigations?|
Yes. Potential applicants should contact the section in charge of the leniency programme via telephone on +81 3 3581 2100 or fax on +81 33581 5599.
The leniency programme defines the fixed reduction rates for surcharges and the fixed number of enterprises entitled to use the programme as follows.
|18||Is there a criminal enforcement track? If so, who is responsible for it?||Yes. With respect to serious cases of AMA violations, including cartels and bid-rigging, the JFTC files cases with the prosecutor general to seek for criminal penalties. The JFTC has a special department for criminal investigation in the Investigation Bureau.|
In March 2018, the JFTC filed a criminal accusation with the prosecutor general against four construction companies and two individuals over coordination of bids in the Maglev railway
|19||Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?||Yes. With respect to serious cases of AMA violations, including cartels and bid-riggings, the JFTC files the cases with the Prosecutor General to seek for criminal penalties.|
|20||Are there any plans to reform the competition law?||No.|
|21||When did the last review of the law occur?||The bill to amend the AMA was passed on 19 June and promulgated on 26 June 2019. The purpose of the amendment is to deter “unreasonable restraint of trade”, etc, effectively, invigorate the economy, and enhance consumer interests by fair and free competition, through increasing incentives for enterprises to cooperate in the JFTC’s investigation and imposing an appropriate amount of surcharges according to the nature and extent of the violation. The Outlines of the Enacted Act are as follows:|
|22||Do you have a separate economics team? If so please give details.||The JFTC does not have a separate economic unit. However, since April 2016, an Economic Analysis Team, which is consisted of the JFTC officials with economic expertise engaging in other main duties, has been launched within the JFTC. The team supports divisions or offices on the basis of knowledge on economics or statistics when they investigate merger or non-merger cases, etc.|
Moreover, the JFTC operates the Competition Policy Research Centre (CPRC) to strengthen the theoretical foundation for enforcement, planning and assessment of competition law and policy. The external economists and experts on competition law are appointed to director and chief researchers of the CPRC.
Currently, the CPRC is constituted of a director and four chief researchers.
|23||Has the authority conducted a dawn raid?||Yes. Dawn raids are made on companies suspected of illegal acts and others related to illegal acts to collect and investigate accounting books and related documents.|
|24||Has the authority imposed penalties on officers / directors of companies for offences committed by the company?||No. However, in criminal cases, a person who has violated AMA is punished and the JFTC has exclusive power to file a criminal accusation to the public prosecutor general. In March 2018, the JFTC filed a criminal accusation with the prosecutor general against four companies, Taisei Corporation (Taisei), Kajima Corporation (Kajima), Obayashi Corporation (Obayashi) and Shimizu Corporation (Shimizu), and two related executives in Taisei and Kajima over coordination of bids in the Maglev railway construction project. The four companies and the two executives were indicted by Tokyo district Public Prosecutor’s Office. In October 2018, Obayashi and Shimizu were imposed a penalty in Tokyo District Court. As of August 2020, the litigation against the remaining two companies and two executives is pending in Tokyo District Court.|
|25||What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?|
The JFTC sets several notification thresholds according to the types of mergers, such as shareholding (article 10), merger (article 15), company split (article 15-2), joint share transfer (article 15-3) and acquisition of business (article 16). As an example, concerning a share acquisition (paragraph (2), article 10), if the following three conditions are met, a plan of the proposed share acquisition has to be filed with the JFTC within 30 days prior to the date of the acquisition:
|26||Are there any restrictions on investments that involve less than a majority stake in the business?||As mentioned above, a party acquiring more than 20 per cent of the acquired party’s shares is required to file a notification to the JFTC.|
Japan: from the enforcer's competition economists
THE HANDBOOK OF COMPETITION ECONOMICS (2021)
|Competition Policy Research Center|
|1||How many economists do you employ? How many have PhDs in industrial organisation?||The Japan Fair Trade Commission (JFTC) has four full-time economists, three of whom have a PhD in economics.|
The JFTC has three economists with PhDs working as director and chief researchers of the Competition Policy Research Centre (CPRC), which is set under the general secretariat of the JFTC.
The CPRC is led by distinguished economist Professor Noriaki MATSUSHIMA, who has been the director of the CPRC since April 2020.
|2||Do you have a separate economics unit, or ‘bureau’?||The JFTC does not have a separate economic unit. However, since April 2016, an Economic Analysis Team, which is consisted of the JFTC officials with economic expertise engaging in other main duties, has been launched within the JFTC. The team supports divisions or offices on the basis of knowledge on economics or statistics when they investigate merger or non-merger cases, etc.|
Moreover, the JFTC operates the Competition Policy Research Center (CPRC) to strengthen the theoretical foundation for enforcement, planning and assessment of competition law and policy. The external economists and experts on competition law are appointed to director and chief researchers of the CPRC.
Currently, the CPRC is constituted of a director and four chief researchers.
|3||Do you have a chief economist?||No, the JFTC does not have an institutional position of chief economist in the same way as DG Competition in the European Commission. However, the Economic Analysis Team has a team leader.|
|4||To whom does the chief economist report?||The team leader of the Economic Analysis Team summarises the discussion and gives advice or opinions to divisions that consult with the Economic Analysis Team. (Reports on research conducted by the CPRC are given to the JFTC and released after the director of the CPRC supervises and approves them.)|
|5||Does the chief economist have the power to hire his/her own staff?||No, the team leader of the Economic Analysis Team does not have the power to hire his or her own staff.|
|6||To what degree is the economics unit called on to be a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances?||All divisions in the JFTC can consult with the Economic Analysis Team at any time. The Economic Analysis Team can give any advice to the divisions concerned.|
As mentioned above, the JFTC does not have a separate economics unit. Instead, the Economic Affairs Bureau has several economists in its several divisions, including the M&A division. When an M&A case requires in-depth economic analysis, the economists of the M&A division join the case team handling the proposed transactions. Analyses by the economists are taken into consideration when making the decisions.
Also, note that the economists of the M&A division review all case reports drafted by the case teams.
|7||Does the agency include a specialist economist on every case team? If not, why?||No. As to M&A cases, as mentioned above, the economists of the M&A division join the case teams reviewing M&A cases which require in-depth economic analysis, but not all M&A reviews require in-depth economic analysis.|
|8||How much economics work is outsourced? What type of work is outsourced?||None.|