Japan: Antitrust Litigation

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In summary

The number of private antitrust cases has been increasing recently in terms of both damage suits and injunctions, but recent court judgments have dismissed plaintiffs’ damage claims due to parties’ agreements on exclusive jurisdictions of foreign courts. Foreign companies should keep an eye on future developments on this jurisdictional issue.

Discussion points

  • Overview of private antitrust litigation activity;
  • legislative framework for private antitrust enforcement;
  • discovery;
  • calculation of damages;
  • settlement; and
  • extraterritoriality.

Referenced in this article

  • Shimano v. Apple, Tokyo District Court judgment on 4 September 2019 (Heisei 26 (Wa) No. 19860);
  • Kyocera v. Hemlock, Tokyo High Court judgment on 25 October 2017 (Heisei 28 (Ne) No.5514); and
  • Marine Hose Investigation, the Japan Fair Trade Commission’s (FTC) cease-and-desist order on 20 February 2008.

Overview of private antitrust litigation activity

The number of private antitrust cases has been increasing recently, in terms of both damage suits and injunctions, with several cases pending at judicial courts.

Among several types of private litigation, damage suits in bid-rigging cases have long been the most prevalent in Japan. Recent notable cases include the damage suit brought by the Tokyo metropolitan government in relation to the bid-rigging of waste incinerators, in which the Tokyo District Court ordered the defendants to pay ¥9.7 billion,[1] and the damage suit brought in relation to the bid-rigging of iron bridges, in which the Tokyo High Court ordered the defendants to pay ¥80 million,[2] both of which were brought after the FTC, the sole administrative regulator for competition in Japan, had issued a cease-and-desist order and required the payment of administrative fines (surcharges) against defendants.

In addition to these notable damage suits, injunctive relief against unfair trade practices (eg, predatory pricing, unilateral refusal of trade, obstruction to competitors’ trading, resale price maintenance, and prohibition of parallel imports, all of which are prohibited under article 19 of the Anti-Monopoly Act (AMA), was introduced in 2001. There were several cases in 2011 and 2012 in which district courts granted provisional and permanent injunctive orders based on defendants’ unfair trade practices.

In 2009, the amendment of the AMA (the 2009 Amendments) implemented a special rule dealing with court orders to produce documents in court proceedings concerning injunctive relief. The 2009 Amendments also changed the system regarding courts seeking the Japan FTC’s opinion on calculation of damages in damage suits.

Legislative framework for private antitrust enforcement

Damages claims under article 25 of the AMA

Under article 25 of the AMA, parties found by the FTC to be engaged in private monopolisation, unreasonable restriction of trade[3] (cartels and bid-rigging), or unfair trade practices are liable to indemnify those injured by such parties.

The plaintiff need not prove the defendant’s intent or negligence as to the harmful acts in an article 25 action; the relevant court will instead rely on the FTC findings from the order, and the defendants cannot challenge these facts. A cease-and-desist order or order to pay administrative fines needs to be finalised before the plaintiff takes action under article 25 of the AMA, while plaintiffs can also file damage suits as a general tort claim under article 709 of the Japanese Civil Code (an article 709 action, see ‘General tort claims under the Civil Code’) even before relevant FTC orders become final.

In an article 25 action, plaintiffs still need to prove the amount of damages and the reasonable causation between the defendant’s conduct and the damages. However, article 84 of the AMA allows the court to request an opinion from the FTC on the scope and calculation of damages in an article 25 action, reducing the burden of proof.

General tort claims under the Civil Code

Under article 709 of the Civil Code, persons who violate another person’s rights must pay the damages resulting from their actions; an article 709 action is available in competition law cases. Plaintiffs can choose to file either an article 25 or 709 action, if both measures are available.

A plaintiff in an article 709 action must prove the defendant’s intent or negligence, the amount of damages, and the reasonable causation between the defendant’s conduct and the damages. In practice, however, the burden of proof regarding the defendant’s intent or negligence is not deemed important: violations of the AMA are usually associated at least with the negligence of the violators.

As a recent example, in the USEN private monopoly case, an article 709 action damage suit was filed by a USEN Corporation’s competitor, after the FTC issued a cease -and -desist order against USEN. The Tokyo District Court partially admitted the plaintiff’s claims, and finally settled at Tokyo High Court in July 2010, whereby USEN agreed to pay ¥2 billion to the competitor.

Injunctions under article 24 of the AMA

Under article 24 of the AMA, a plaintiff may seek an injunction (provisional as well as permanent) against certain unfair trade practices such as predatory pricing, unilateral refusal of trade, obstruction to competitors’ trading, resale price maintenance and prohibition of parallel imports (an article 24 action). Although article 24 does not allow injunctions based on a breach of article 3 (cartels, bid-rigging and private monopolisation), some types of article 3 violations can also be deemed unfair trade practices and thus subject to article 24 actions.

An article 24 action must be brought in the district courts, including Tokyo District Court. A district court’s decision can be appealed to a high court, and a high court decision can further be appealed to the Supreme Court.

For the first 10 years following the introduction of the article 24 action in 2001, there were no successful injunction cases. This was partly because an article 24 action requires the private plaintiff to demonstrate ‘extreme damages’, which is a somewhat higher standard than the ordinary level of damages for plaintiffs to prove in damage suits.

Recently, however, the trend has been gradually changing: in March 2011 the Tokyo District Court issued the first decision in which a private plaintiff prevailed in an article 24 injunction case. In this case, the Tokyo District Court found that the defendant disseminated a falsehood injurious to the plaintiff’s business reputation and thereby obstructed businesses of the plaintiff. Utsunomiya District Court issued a permanent injunction in November 2011 against a local bus company that engaged in predatory pricing. Osaka High Court also issued a permanent injunction in October 2014 against a local taxi operator.

Invalidation of contract under article 90 of the Civil Code

Any person can file a civil lawsuit alleging invalidity of contract under article 90 of the Civil Code, which is a general provision invalidating any legal conduct violating public interests. In determining violations of public interests, the fact of a breach of the AMA has been taken into consideration in the courts.

Class actions

Class actions are not available in Japan. Certified consumer groups may act as a ‘class’ and seek injunctions for certain types of lawsuits, but this scheme is not available in private antitrust litigations.

Limitation period

An article 709 action must be brought to the district courts either within three years of the possible victim or plaintiff becoming aware of the conduct that caused the damages or within 20 years of the execution of such conduct, whichever is earlier. Damages claims under article 25 of the AMA must be initiated within three years from the date when the FTC’s relevant cease-and-desist order became irrevocable.


General rule by the Civil Litigation Code

There is no US-style mandatory document production or extensive discovery system in Japan, except when a court orders a production of documents under the Civil Litigation Code.

Under the Civil Litigation Code, courts can request production of documents not only to the counterparty, but also to third parties. The scope of the court order has been expanded in recent private antitrust litigation. A court has ordered production of documents retained by the FTC, such as interview records prepared by the FTC and reports produced by the defendant in reply to the FTC’s requests for information.

Under the Civil Litigation Code, the relevant party must comply and submit requested materials if the court orders. If the ordered party does not submit the relevant evidence, the other party and the court are generally entitled to deem such other party’s allegations related to such materials’ content to be accurate. There are several exceptions, such as documents subject to public servants’ obligation of confidentiality; documents created exclusively for self-use; and documents relating to the right to remain silent under criminal procedure.

The 2009 Amendments introduced a special rule for such a court order relating to an article 24 action. The relevant party is entitled to request that the other party submit materials as ordered by the court, except for cases where there is a justifiable reason to reject the requested materials’ submission. This rule expands the scope of documents to be disclosed, since it targets all documents except for those with a justifiable reason not to be submitted.

Leniency application

Evidence produced to the Japan FTC by a leniency applicant in cartel cases could theoretically be disclosed to the subsequent court proceedings if courts request the Japan FTC to do so. However, the FTC has a policy under which it will not disclose information submitted by leniency applicants unless they wish otherwise. Therefore, in practice, it is likely that such information will be excluded from the court’s request for disclosure.

Calculation of damages

In both article 25 and 709 actions, damages are limited to those cases where causal links between damages and violation have been successfully demonstrated. Under Japanese law, treble damages are not available.

‘Before and after’ theory

Concerning how damages awards are determined, the ‘before and after’ theory is often used as a method of calculating damages in private antitrust litigation. Under this theory, the actual price of the relevant product or service before the cartel’s commencement is compared with that within the cartel period, and the difference will be deemed the amount of relevant damages. This calculation method is often used in practice, and the Japan FTC also uses this method to produce its opinion when requested by the courts.

If the scope of the damages is uncertain and the ‘before and after’ theory is not available or is inappropriate, the court may determine the amount of damages at its discretion, which is allowed under article 248 of the Civil Litigation Code. For example, in recent bid-rigging cases, courts found that relevant damages should be approximately 5–10 per cent of the relevant products’ turnover within the period of the cartel.

In addition, recently the government, local governments and public corporations have generally inserted clauses for penalty charges into contracts in a tender, which specify an agreed amount of damages to be paid if the FTC subsequently finds violations of the AMA such as bid-rigging. Typically, the amount specified in such provision is between 10 and 20 per cent of the contract value.

Pass-on defence

The defendant is free to allege that no damages should be granted to the direct-purchaser plaintiff, where the plaintiff has already passed on the amount of the damages to its customers. However, pass-on defence is not regarded as a factor when considering the issue of standing.

Interest and attorneys’ fees

When calculating the amount of damages payable on the judgment date, the court will include interest (at a per annum rate of 5 per cent) from the date on which the relevant illegal conduct occurred until the date on which the defendant pays such damages.

Attorneys’ fees may be partially recoverable if the court finds it appropriate. The courts typically order 10 per cent of awarded damages as recovery of lawyers’ fees, without providing any reason therefore.


Settlement in civil litigation is available in either the course of court procedures or outside the courts.

In the course of civil litigations at the courts, judges often recommend a settlement to the parties, typically immediately before moving to witness examinations or immediately after completing witness examinations, and the court creates a record of settlement if a settlement is reached. In practice, judicial settlements have resolved many civil antitrust cases.

There are no specific procedures for settlements outside the courts, although sometimes parties make a settlement record at a notary’s office because notarised settlement records concerning monetary liabilities are enforceable just as are courts’ final judgments.

Recent examples of settlements include the USEN private monopoly case, where a competitor filed an article 709 action against USEN and settlement was reached in July 2010, with USEN agreeing to pay ¥2 billion to a competitor.


Effects doctrine

As long as a violation of the AMA has a substantial effect on the Japanese market, the AMA can apply to conduct in a foreign country or by a foreign party (the effects doctrine). The ‘Japanese market’ entails consumers located in Japan.

In terms of administrative and criminal proceedings, if there is a conflict of jurisdiction, the Japanese government will respect international comity. An interesting example of extraterritoriality of the AMA is the marine hose international cartel case of February 2008, in which case the Japan FTC issued a cease-and-desist order for the first time to parties involved in an international cartel. In this case, relevant parties included foreign parties, and cartel activities were carried out in foreign countries.

Jurisdiction by civil courts

In the sphere of private antitrust litigation, the effects doctrine will likely be applied in the same manner as the FTC’s administrative investigations, although there is no specific statute regarding extraterritoriality (or jurisdiction) of the AMA to be applied in private lawsuits. Therefore, it is possible that foreign companies will face private lawsuits from Japanese consumers for violations of the AMA that take place outside Japan.

Having said that, a recent Tokyo district court’s judgment on Shimano v. Apple,[4] where Shimano argued that Apple’s requests to the supplier fell within ‘unfair abuse of superior bargaining position’, stated that parties of transactions could effectively escape from review by Japan’s courts by entering into agreements to an exclusive jurisdiction of foreign courts (Californian courts). Tokyo High court also dismissed another damage claim in Kyocera v. Hemlock[5] based on an exclusive jurisdiction of foreign courts (Michigan courts), which was expressly stated in a supply agreement.


[1] Tokyo District Court, 20 March 2007.

[2] Tokyo High Court, 30 August 2011.

[3] Article 3 of the AMA.

[4] Tokyo District Court, 4 September 2019 (Heisei 26 (Wa) No. 19860).

[5] Tokyo High Court, 25 October 2017 (Heisei 28 (Ne) No. 5514).

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