Japan: E-Commerce

Overview

Throughout 2019, the Japan Fair Trade Commission (JFTC) proactively released policy documents that focus on e-commerce. In accordance with the Government of Japan’s entire policy, the JFTC continues to pay close attention to the potential competition concerns caused by digital platform operators. 1 Thus, it is reasonably anticipated that the JFTC will actively enforce the Anti-Monopoly Act (AMA) and establish policy arguments in the e-commerce sector in 2020.

The JFTC has taken enforcement actions against alleged infringements by global e-commerce companies in the past several years; parts of these enforcement actions are still ongoing. There is also an ongoing merger review regarding the business integration between two platform giants.

The JFTC amended their guidelines for distribution, in which the JFTC shows, among other things, examples of issues relevant to the application of the Anti-Monopoly Act (AMA) to the e-commerce sector. The JFTC also released some administrative guidelines in 2019. 2

Various policy and academic discussions in the e-commerce sector have been taking place in the JFTC and other authorities. In addition to above, the JFTC announced the results of a sector inquiry on the e-commerce sector, launched in January 2018; 3 and results of a sector inquiry on digital platform operators, launched in January 2019. 4

Recent enforcement actions

Amazon: parity clauses imposed by a platform company 6

On 8 August 2016, the JFTC conducted a dawn raid on Amazon Japan GK (Amazon Japan) based on suspicion of misconduct, including imposition of certain parity clauses on sellers regarding its online sales platform (Amazon Marketplace). It took the view that this may be evaluated as restrictive trading prohibited by paragraph 12 of the Designation of Unfair Trade Practices and a violation of the AMA. The JFTC was concerned that when an online shopping platform imposes certain parity clauses on sellers, such clauses may:

  • restrict sellers’ business activities by limiting the reduction of prices and the range of goods that the sellers sell via other sales channels;
  • distort competition among online shopping platforms by allowing an online shopping platform to impose those parity clauses to achieve the lowest price sold in its online shopping platform without making any competitive effort; and
  • reduce online shopping platforms’ incentives for innovation and hinder new entrants.

On 1 June 2017, the JFTC announced that it had terminated its investigation of Amazon Japan based on the recognition that voluntary measures proposed by Amazon Japan could be evaluated as being sufficient to eliminate the JFTC’s concerns. The JFTC also announced on 15 August 2017 that it had received a report from Amazon Services International, Inc (ASII), the company responsible for e-book delivery business on Amazon.co.jp. The report mentioned that ASII would take voluntary measures on the parity clauses contained in the agreements with publishers or distributors of e-books delivered from the website. According to the JFTC’s announcement, it recognised that the voluntary measures proposed by ASII would basically eliminate the JFTC’s concerns regarding the e-book delivery business on the Amazon.co.jp website. 7

Airbnb: exclusive dealing

In the autumn of 2017, the JFTC conducted a dawn raid on Airbnb Japan on suspicion that its business may violate the AMA by requiring exclusivity from its counterparties. 8 Under the AMA, one party cannot trade with a counterparty on the condition that the counterparty does not trade with the party’s competitor if such restriction tends to reduce trading opportunities for one’s competitors (paragraph 11 of the Designation of Unfair Trade Practices, article 2, paragraph 9 of the AMA). Although the Airbnb spokesman announced that this was not the case, 9 the JFTC was reportedly concerned that Airbnb asks its property management agencies not to list properties on rival home-sharing platforms by, among other means, forcing to accept an agreement that contains a clause that the property management agencies may not use rival sites. While the JFTC has not made an official announcement on the case yet, the JFTC is believed to be actively analysing the case and the case is still ongoing.

Minna no Pet Online: exclusive dealing

On 27 February 2018, the JFTC conducted a dawn raid on Minnano Pet Online Co Ltd (Minnano Pet) on suspicion that its business may violate the AMA by restricting its customers from posting information on competitors’ website. According to the JFTC’s announcement, 10 Minnano Pet operated two websites to intermediate the transactions of dogs and cats between breeders and consumers, and is an influential enterprise operating pet intermediation online in light of the track record of intermediation through its own website. As mentioned above, under the AMA, one party cannot trade with a counterparty on the condition that the counterparty does not trade with the party’s competitor if such restriction tends to reduce trading opportunities for one’s competitors (paragraph 11 of the Designation of Unfair Trade Practices, article 2, paragraph 9 of the AMA). In this case, the JFTC was concerned that Minnano Pet may restrain fair competition with other platform operators and cause unfair restraint of trade by restricting the breeders that register with Minnano Pet’s site from posting information about dogs and cats on other pet intermediate websites.

On 23 May 2018, the JFTC announced that it had terminated its investigation of Minnano Pet based on the recognition that voluntary measures 11 proposed by Minnano Pet could be evaluated as being sufficient to eliminate the JFTC’s concerns. 12

Some travel booking platform operators: parity clauses imposed by platform operators

On 10 April 2019, the JFTC conducted a dawn raid on some travel booking platform operators including Rakuten, Inc (Rakuten), Japan subsidiaries of Booking.com and Expedia, on suspicion that their business may violate the AMA by imposing certain parity clauses on accommodation operators regarding their travel booking platforms. It took the view that they may be evaluated as restrictive trading prohibited by paragraph 12 of the Designation of Unfair Trade Practices and a violation of the AMA.

On 25 October 2019, the JFTC announced that it had approved the commitment plan submitted by Rakuten regarding the suspected violation of Rakuten on the use of parity clause on its platform. 13 According to the JFTC’s announcement, the contracts between Rakuten and accommo­dation operators that place information on accommodations on the website Rakuten Travel, which Rakuten operates, contain conditions that require that the operators make the prices and number of rooms they place on the website equal to or better than those placed through other distribution channels. In response to the JFTC’s scrutiny, Rakuten submitted a package of commitments. The major items included in the commitments are:

  • ceasing the activities suspected by the JFTC as violating the AMA;
  • passing a board of directors’ resolution approving the cessation of these suspected activities;
  • not conducting activities similar to the suspected activities for the next three years; and
  • preparing guidelines for compliance with the AMA and introducting a regular training system in relation to the suspected activities.

As of the end of January 2020, travel booking platform operators other than Rakuten continue to discuss concerns expressed by the JFTC regarding their business.

Merger review cases

Yahoo Japan/Ikyu 14

In the 2015 financial year, the JFTC reviewed Yahoo Japan’s (Yahoo) acquisition of all shares of Ikyu Corporation (Ikyu). Yahoo operates an internet advertising business and Ikyu operates businesses relating to the online reservation of travels and restaurants.

Although the case itself was not challenging because the market shares of the relevant markets were below safe harbour thresholds, the case is important since the JFTC publicly showed its views on two-sided markets. The JFTC mentioned in this case that two-sided market is a market that has:

  • different multiple users;
  • a platform that provides brokerage functions among different multiple users; and
  • indirect network effects.

Based on this analysis, the JFTC defined the following as relevant markets in this case:

  • online travel reservation service;
  • online restaurant reservation service;
  • metasearch service for online travel reservation; and
  • metasearch service for online restaurant reservation.

Media Do/Digital Publishing Initiatives Japan 15

In the 2016 financial year, the JFTC reviewed Media Do’s (MD) acquisition of majority shares of Digital Publishing Initiatives Japan (DPIJ). Both companies operate businesses relating to e-books. In this case, the JFTC defined a two-sided market in the e-book sector. The JFTC made a thorough analysis on the distribution system of e-books and defined this market as ‘e-book brokerage’. Although the consolidated market shares of MD and DPIJ in the e-book brokerage market is approximately 60 per cent, the JFTC issued a non-conditional clearance. Among relevant factors, the JFTC placed importance on:

  • competition pressures from other e-book brokers;
  • actual and potential new entrants; and
  • competition pressures from customers who switch to other e-book brokers to direct transactions between e-book publishers and e-book retailers, and to other e-book retailers that purchase e-books without using e-book brokers.

Yahoo Japan/eBOOK Initiative Japan 16

In the 2016 financial year, the JFTC reviewed the acquisition of minor shares by Yahoo Japan, a subsidiary of Soft Bank Japan (SBJ), of eBOOK Initiative Japan (EIJ). Both companies operate businesses relating to e-books. Although the case itself was not challenging because the market shares of the relevant markets were below safe harbour thresholds, the case is important since the JFTC publicly showed its view on the market definition of e-book business. The JFTC analysed the substitutability between regular books and e-books, and reached the conclusion that such substitutability is limited, at least under current conditions. 17

Z Holdings/ZOZO

On 13 November 2019, Z Holdings Corporations, a parent company of Yahoo (Z Holdings) acquired 50.1 per cent shares of ZOZO Co, Ltd (ZOZO). 18 Though the JFTC has not yet officially announced any information regarding the transaction, it is considered that the JFTC made a merger review for the transaction, which is evaluated as a business combination between two of the most major e-commerce platform operators in Japan.

Z holdings/LINE

On 23 December 2019, Z Holdings and LINE Corporation (LINE), together with their respective parent companies, entered into a definitive agreement concerning the business integration of the two businesses. 19 Though the JFTC has not yet officially announced any information regarding the merger review for the transaction, it is considered that the JFTC will make a merger review for the transaction, which is evaluated as a business combination between two of the most major digital platform operators in Japan.

Recent amendments of statutes and guidelines

Amendments of the Distribution Guidelines 20

The amendment of the Guidelines Concerning Distribution Systems and Business Practices under the AMA 21 (Distribution Guidelines) on 16 June 2016 is the first substantial change since its enactment. 22 The amendment covers a wide range of topics, but the three main features are:

  • clarification of the review processes for suspected conduct;
  • outlining the JFTC’s policy regarding its attitude to online transactions; and
  • increasing the number of references to administrative precedents and prior consultations relevant to vertical restraints.

As regards the clarification of review processes for suspected conducts, the amendment was accomplished in light of similar guidelines in other jurisdictions such as the EU Commission’s Guidelines on Vertical Restraints. 23 At the same time, the amended Distribution Guidelines categorise various vertical restraints by the scope of their anticompetitive effects. With respect to online transactions, the amended Distribution Guidelines emphasise the pro-competitiveness of online transactions based on the recognition that online transactions generally broaden geographic and client reach compared to real-site transactions ,and provide efficiencies with suppliers and consumers. 24

The amended Distribution Guidelines demonstrate the JFTC’s position that online transactions should be reviewed under the same fundamental principles as real site transactions. 25 In the guidelines, the JFTC explains that a platfor owner’s actions towards users of its platform are also to be reviewed under the same fundamental principles as real site transactions. 26 As for the details of the analysis of vertical restraints by platform businesses, the amended Distribution Guidelines point out that competition status among platform businesses and network effects 27 should be taken into account in addition to relevant factors that the JFTC considers in the course of its review on traditional businesses (eg, inter-brand competition, intra-brand competition, relevant players’ market shares, competitive effects on counterparties, and numbers and market position of counterparties) 28 (Section 1-3-(1)).

In the amended Distribution Guidelines, the JFTC inserted an example of passive sales in the context of geographic restrictions. As with theEuropean Commission’s Guidelines on Vertical Restraints, 29 the amended guidelines state that when a customer gets to know a product on the website of a distributor and places an order for the distributor, or a customer who chooses to continuously receive information such as mail magazines from a distributor, and the customer places an order with the distributor based upon the information and the order leads to a sale, it constitutes a passive sale. When a manufacturer imposes strict geographic restrictions on its distributors and prohibits them from making transactions with a customer outside the distributor’s territory, the manufacturer’s conduct is prohibited under the AMA as an Unfair Trade Practice (paragraph 12 of the Unfair Trade Practices, article 2, paragraph 9 of the AMA) 30 (Section2-3-(4)).

Amendments of the AMA to introduce the Commitment Procedure

On 30 December 2018, a new procedure for terminating an investigation under the AMA came into force called kakuyaku-tetsuduki or ‘commitment procedure’. Under the procedure, like the commitment procedure in Europe, the JFTC’s investigation may be terminated without issuing a cease-and-desist order or surcharge order when an investigated company voluntarily proposes effective remedies to the JFTC and the JFTC approves them. 31 As at the timing of writing, there have not been any publicly announced cases that have been terminated through this procedure. It is possible that the JFTC may become active for investigating the e-commerce sector as a result of the introduction of this procedure since the investigated company and the JFTC could find a reasonable solution to terminate an investigation by making use of this procedure.

Amendments of the guidelines and policies regarding merger review

On 17 December 2019, the JFTC announced the amendments of its Guidelines to the Application of the Antimonopoly Act Concerning the Review of Business Combinations, published 31 May 2004 (the Business Combination Guidelines) and Policies Concerning Procedures for the Review of Business Combinations, published 14 June 2011 (the Business Combination Procedures Policies). The amendments are being made in accordance with the entire policy of the Japanese government as shown in the Action Plan for Growth Strategy (21 June 2019 Cabinet Decision) and address various new issues relevant to merger reviews in the digital market. At the same time, amendments to the Business Combination Guidelines provide a detailed explanation on the JFTC’s merger policies regarding vertical and conglomerate business combinations. Furthermore, amendments to the Business Combination Procedures Policies can be understood as the intro­duction of a kind of size of transaction test as thresholds for voluntary consultations.

Introduction of the Guidelines Concerning Abuse of a Superior Bargaining Position in Transactions between Digital Platform Operators and Consumers that Provide Personal Information, etc

On 17 December 2019, the JFTC introduced its Guidelines Concerning Abuse of a Superior Bargaining Position in Transactions between Digital Platform Operators and Consumers that Provide Personal Information, etc (the Guidelines). The Guidelines were made in accordance with a proposal made under the Fundamental Principles for Rule Making to Address the Rise of Platform Businesses Formulated, published 18 December 2018. The proposal states that ‘the application of rules on abuse of a superior bargaining position with respect to relationships with consumers who provide data related to themselves as a consideration for the services will be considered.’ The Guidelines make known the JFTC’s view that a digital platform operator has a superior bargaining position over consumers who provide personal information when the consumers, even though suffering detrimental treatment from the digital platform operator, are compelled to accept this treatment in order to use the services provided by the digital platform operator.

The Guidelines also explained various types of abuses of a superior bargaining position, including when:

  • a digital platform operator causes consumers to provide personal information without stating the purposes of its use, such as on its webpage or by other means;
  • a digital platform operator acquires or uses personal information contrary to consumers’ intention beyond the scope necessary to achieve the purpose of use, such as by providing consumers’ personal information to third parties without consent;
  • a digital platform operator acquires and uses consumers’ personal information without taking precautions necessary and appropriate for ensuring the safe management of personal information; and
  • a digital platform operator causes consumers who continuously use its services to provide economic interests, such as unnecessary personal information, in addition to compensation provided in exchange for the use of services.

Possible introduction of a new legislation regarding transactions relevant to digital platform operators

In order to seek appropriate trade practices relevant to digital platform operators, the Japanese government plans to introduce a new legislation tentatively called Transparentizing Act for Transactions Involving Digital Platform Operators. Though the details of the act are yet to be revealed, the Secretariat Office for the Digital Market Competition in the Cabinet Secretariat has released a policy document regarding the Act under the title of Future Directions of the Transparentizing Act for Transactions Involving Digital Platform Operators (Tentative Name) 32 in December 2019. The new Act is expected to be submitted to the present session of the Diet.

Policy discussions

Study report on data and competition policy 33

Big data is one of the most important competition factors in the e-commerce industry. A policy report discussing the interactive relationship between data and competition policy was recently released by the JFTC Study Group on Data and Competition Policy. The study group mainly comprises academic professionals and antitrust law practitioners. Their report, released on 6 June 2017, discusses how Japan’s AMA may address issues caused by today’s data-driven society. The report clearly endorses the notion that the accumulation and utilisation of data promotes competition and creates innovation. On the other hand, it mentions that some situations justify intervention under the AMA and provides possible application of the Act in each such situation. The report provides some suggestions for analysing competition concerns when business combination accompanies significant data accumulation, including that free services such as social networking services be recognised as a relevant market for the purpose of market definition.

As regards competition analysis, the report suggests that whether a proposed business combination with data accumulation harms competition should also be examined from the following perspectives:

  • competition for artificial intelligence techniques or goods and services related to data; or
  • competition in the data market in a situation where similar data is bought and sold in a data market.

As for data collection, the report says it may be an abuse of superior bargaining position when a company A which has a superior bargaining position unilaterally demands that the other company B provide data to company A when company B wants to enter into an alliance with company A. In addition, the report points out that a digital platfor’s collection of personal information not in accord with relevant laws in Japan may be an issue for antitrust law if its service ‘locks in’ customers, although such conduct is primarily addressed by the Act on the Protection of Personal Information. 34

Regarding data hoarding, the report suggests that refusal of access to data by competitors or customers may be a violation of the Anti-Monopoly Act if the data is essential for competitors’ business in certain conditions, such as when:

  • the refusal of disclosure has no reasonable grounds other than exclusion of the competitor based on the fact that the data has been disclosed to the competitor; or
  • the refusal of access may result in exclusion of competitor based on the fact that the company is obliged to allow customers to access the data.

The report also suggests that it may be a violation of the AMA in certain conditions if a company ties data provision and data analysis services together or demands that its customer not trade with its competitors on condition of providing data or analysis techniques. While the report suggests that joint collection and joint use of data generally foster competition, it notes that businesses should pay attention to joint data collection that would allow businesses in the market to conjecture competitors’ price and quantity. The media covering the release of the report has been rather sensational at times.

The report does not aim to provide a brand new approach or a new way of regulating competition in a data-driven society. As mentioned before, the report generally emphasises positive effects on competition associated with the accumulation and utilisation of data. In addition, while the report mentions some circumstances in which competition law issues may arise with regard to data accumulation or utilisation and tries to provide some suggestions on how to approach those issues, the suggestions provided in the report are essentially based on regular interpretation of the AMA. Since the Act has no exemption for the accumulation or utilisation of data, it is natural that standard interpretations are applied to them. In this regard, the report may not contain anything greatly unexpected for antitrust law practice in Japan. Nonetheless, however, the report provides some suggestions based on meticulous observation of the latest discussion in international arenas such as the OECD and various jurisdictions.

As well as discussions of possible applications of the relevant clauses of the AMA, the report provides some suggestions. It discusses a situation where a platformer with market power can form, maintain or strengthen its market power by changing its data policy for customers – the situation is similar to the investigation 35 by Germany’s Federal Cartel Office against Facebook for alleged abuse of a dominant position in the social networking market. The report suggests that the Act on the Protection of Personal Information 36 or other consumer protection laws are the primary choices to handle such situations. But it also argues that the AMA may be an option to address the issue when an anticompetitive effect arises and identifies legal issues to consider when applying the prohibition of private monopolisation as well as of an abuse of superior bargaining position.

Report by the Study Group for Ideal Approaches to Competition Policies for the Fourth Industrial Revolution

The competition enhancement office of the Ministry of Economics, Trade and Industry (METI) set up ‘a Study Group for Ideal Approaches to Competition Policies for the Fourth Industrial Revolution,’ which released its report dated 28 June 2017. 37 Compared to the JFTC study group, the METI study group has paid more attention to encouraging growth in data-related industries in Japan by maintaining a fair competition environment. It may be evaluated as a reflection of the METI’s industrial policy mission. 38 In the report, the METI study group categorises data-related businesses into four different models in accordance with the level of the utilisation of data:

  • the Independent Growth Model (ie, data to be accumulated or utilised for the improvement of products and services);
  • the Concomitant Provision Model (ie, data gained from products and services to be utilised for incidental service); 39
  • the Other Field Utilization Model (ie, data gained from products and services to be utilised in a different market); 40 and
  • the Multi Fields Interlocking Model (ie, data gained from many markets of products and services to be mutually accumulated or utilised). 41

The report also presents factors to be considered and the following three steps to be examined to analyse competition law issues in each model:

  • the impact of data;
  • the possibility for accumulation; and
  • the possibility for utilisation.

Although the JFTC is the sole enforcer of the AMA, given that the METI is involved in the enhancement of sound competition environment in Japan, conducting further analysis on the report by the METI study group is also important to predict coming antitrust law and policy trends for data-related businesses including e-commerce.

Academic and policy discussions in the Competition Policy Research Center

The Competition Policy Research Center (CPRC) of the JFTC 42 has the objective:

to build and improve functional and sustainable cooperative platforms between inte­llectual resources of outside researchers and practitioners and staff members of the Fair Trade Commission in order to reinforce theoretical foundation on which it operate Antitrust Law and plan, propose, and evaluate competition policy from medium- and long-term perspectives as well as from the perspective to utilize the platform to enforce measures for current issues.43

Regarding the e-commerce sector, the CPRC regularly holds seminars and symposiums, such as:

  • the Concentration of Data in Digital Market and Competition Policy (December 2019), discussing interactions between data concentration in digital markets and its suggestions for competition policy; 44
  • the New Competition Policy in the Digital Society -Platforms and Protection of Personal Information- (December 2018), discussing interactions between competition policy and data protection policy in an era of digital society; 45
  • the New Businesses which make use of big data and AI and Competition Policy (May 2018), discussing the application of competition policy for the new business model in the context of big data and AI; 46
  • the Development of Digital Economy and Competition Policy (March 2018), discussing the future trends of competition policy under ongoing development of digital economy; 47
  • the Digital Economy and Competition Policy (December 2017), discussing competition policy and business strategy of Japanese companies in Digital Economy Era; 48
  • the Emerging Matchmakers Economy and Competition Policy (December 2016), discussing changes of competition law and policy by emerging multisided platformers; 49 and
  • the Vertical Restraints in E-Commerce: from the Competition Policy Perspectives (June 2016), discussing issues of vertical restraints which are unique to E-Commerce transactions. 50

It also regularly issues discussion papers touching on e-commerce, such as:

  • Kazuo Tosa, ‘Issues of Competition Policy regarding Digital Platform Operator’s unilateral conducts – The Meaning of Data with regard to Competition for Innovation’ (December 2019); 51
  • Jérôme Fabre and Masako Wakui, ‘Booking.com Case and Commitment Procedure, Restraint of Trade by the Court and Sector Regulations: Focusing on Parity Clause in Online Tourism Business’ (January 2018); 52
  • Mitsuru Kikkawa, ‘Issues of Competition Policy in the Era of Sharing Economy’ (March 2017); 53 and
  • Hiroshi Ohashi, Naoki Okubo, Chizuru Ikeda, etc, ‘Analysis of Characteristics of Platform Business and Issues of Merger Review’ (December 2015). 54

Since the JFTC positioned digital economy and e-commerce as important policy issues, 55 it is likely that the CPRC will continue to provide advanced academic and policy discussions relevant to the e-commerce sector with government officials and private practitioners in Japan and all over the world.

Fact-finding efforts

Sector inquiry into the e-commerce sector

In January 2018, the JFTC launched a sector inquiry into the e-commerce sector. 56 As with the inquiry into e-commerce sector conducted by the European Commission, 57 the JFTC gathered facts about sales conditions between manufacturers and distributors, sales measures of manufacturers and distributors via their website, and surveys on online market transactions. Furthermore, the JFTC gathered information relevant to the usage of algorithms in the context of e-commerce through the inquiry. In the inquiry, the JFTC announced that it only focuses on the transactions of goods (ie, the JFTC does not include the transactions of service nor digital contents). On 29 January 2019, the JFTC released the result of the sector inquiry in the form of a report, the Survey Report of the trading conditions for consumers via E-Commerce. In it, the JFTC summarises various facts about e-commerce transactions obtained by the survey and provides its position on certain typical arguable trading customs (eg, strict restrictions of online transactions, MFN clauses) from the perspective of the AMA. 58

Survey for digital platform operators

In response to the Interim Report released on 12 December 2018, the JFTC launched a survey for digital platform operators. Since the JFTC is interestined in the applicability of the abuse of ­superior bargaining positions for unfair conduct by platform operators against platform users, the JFTC aimed to obtain relevant facts to substantiate the discussion of its applicability. On 31 October 2019, the JFTC released a final report for the survey titled Report regarding Trade Practices on Digital Platforms (Business-to-Business Transactions on Online Retail Platform and App Store). 59 In it, the JFTC identified various trade practices regarding business-to-business transactions on online retail platforms and app stores, and showed its thoughts on how the AMA would be applied to particular cases which may make competitive concerns.

Survey for digital advertisement businesses

Since the release of its Report regarding Trade Practices on Digital Platforms (Business-to-Business Transactions on Online Retail Platform and App Store), the JFTC has launched a survey for digital advertisement businesses. 60 Though the details of the survey are yet to be made publicly available, the survey is expected to address the overall structure of the business, anti­competitive conducts in the market, and the issues regarding the acquisition and utilisation of the personal information. It is likely that an interim report of the survey will be released in the first half of 2020.

What to expect

It is apparent that the JFTC maintains a considerable interest in the e-commerce sector. For instance, and as explained, the JFTC is currently conducting a merger review for business integrations between large platform operators for whom a major business is e-commerce, and has just launched a survey for digital advertisement businesses. In addition, the Japanese government plans to introduce the Transparentizing Act for Transactions Involving Digital Platform Operators (tentative name). Considering these trends, it is likely that the JFTC, along with other authorities in the Japanese government, will come to introduce new regulations or enforce the relevant regulations more actively in the e-commerce sector for next couple of years.


Notes

1 This can be found in the JFTC chairman’s message of January 2020, available in Japanese at:
https://www.jftc.go.jp/houdou/kouenkai/nentouh2020.html.

2 Amendments of the Guidelines to the Application of the Antimonopoly Act Concerning the Review of Business Combinations, amendments of the Business Combination Procedures Policies and the introduction of Guidelines Concerning Abuse of a Superior Bargaining Position in Transactions between Digital Platform Operators and Consumers that Provide Personal Information, etc.

3 The press release is available only in Japanese at: www.jftc.go.jp/houdou/pressrelease/2019/jan/190129.html

7 ‘Report on e-Books Agreements from Amazon Services International, Inc.’, 15 August 2017. Available at: https://www.jftc.go.jp/en/pressreleases/yearly-2017/August/170815.html.

9 ibid.

11 According to the JFTC’s announcement, Minnano Pet proposed that it would stop restricting its registered breeders from posting information on competitors’ websites and make a public announcement on the new policy.

12 Ibid.

14 Please refer to No.8 of Major Business Combination Cases in FY 2015 available at: https://www.jftc.go.jp/houdou/pressrelease/h28/jun/160608_2.files/160608.pdf.

15 Please refer to No.12 of Major Business Combination Cases in FY 2016 available at: https://www.jftc.go.jp/houdou/pressrelease/h29/jun/170614_01.files/170614.pdf.

16 Please refer to No. 11 of Major Business Combination Cases in FY 2016 available at: https://www.jftc.go.jp/houdou/pressrelease/h29/jun/170614_01.files/170614.pdf.

17 In the course of the analysis, the JFTC referred a report titled ‘Demand Substitutability between Online Service and Offline Service’, issued by the Competition Policy Research Center of the JFTC in 2015 and available at: https://www.jftc.go.jp/cprc/reports/index.files/cr-0315.pdf.

22 The original version of the Distribution Guidelines was introduced on 11 July 1991.

23 The European Commission ‘Guidelines on Vertical Restraints’ (2010/C 130/01). Available at:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:130:0001:0046:EN:PDF.

24 Part I, Section 1-1-(1) of the Distribution Guidelines.

25 ibid.

26 ibid.

27 In the amended Distribution Guidelines, the JFTC provides both direct network effects and indirect network effects (Note 3 of Section 1-3-(1)).

28 Part I, Section 1, 3-(1) of the Distribution Guidelines

30 Part I, Section 2, 3-(4) of the Distribution Guidelines.

38 The METI has announced that it aims to create a new type of industrial society called Connected Industries as a policy concept through which a variety of industries are connected and create new added value. Please refer to: http://www.meti.go.jp/english/press/2017/0628_001.html.

39 The report explains following data usage as an example: maintenance service utilizing operation information gained from a product.

40 The report explains following data usage as an example: setting insurance premiums by utilizing driving records gained through driving support apps.

41 The report explains following data usage as an example: mutual data utilization among many different services including matching, sharing and other online services, various apps, and advertisements.

48 The relevant materials are available in Japanese at: https://www.jftc.go.jp/cprc/koukai/seminar/h29/45_notice.html.

49 The relevant materials are available in Japanese at: https://www.jftc.go.jp/cprc/koukai/seminar/h28/43_notice.html.

50 The relevant materials are available in Japanese at: https://www.jftc.go.jp/cprc/koukai/sympo/2016notice.html.

57 As for the European Commission’s Sector Inquiry, please refer to: http://ec.europa.eu/competition/antitrust/sector_inquiries_e_commerce.html.

60 The topic is mentioned in a press conference of the secretary general of the JFTC. One of the minutes of such press conference is available in Japanese at: https://www.jftc.go.jp/houdou/teirei/2019/oct_dec/kaikenkiroku191218.html

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