OECD kpcdb

1. Scope

 

Article 3 of the AMA prohibits private monopolisation. Private monopolisation is a practice by which an enterprise, individually or by combination, substantially restrains competition in any particular field of trade, contrary to public interest, by excluding or controlling the business practices of other enterprises (Article 2(5) of the AMA).

 

There are two types of private monopolisation: exclusionary private monopolisation and private monopolisation by way of controlling business activities of other enterprises.

 

Exclusionary private monopolisation: Exclusionary conduct refers to various conducts that would cause difficulty for other entrepreneurs to continue their business activities or for new market entrants to commence their business activities, thereby would be likely to cause a substantial restraint of competition in a particular field of trade. The Guidelines for Exclusionary Private Monopolisation under the Antimonopoly Act (2009) describe four typical exclusionary conducts: “below-cost pricing”, “exclusive dealing”, “tying”, and “refusal to supply and discriminatory treatment”.

 

Private monopolisation by control:

Private monopolisation by control means depriving other firms of their freedom to make decisions concerning their business activities and forcing or luring them into obeying the controller.

2. Assessment

In Japan, holding of substantial market power or dominant position itself is not prohibited. Only abusive behaviour by a company with such position is prohibited. The JFTC does not rely on a certain specific criteria to determine anti-competitiveness. It comprehensively considers various factors including market-share on a case-by-case basis to assess whether or not competition is substantially restrained as the requirements for exclusionary private monopolisation. These factors include competitors’ conditions, potential competitive pressure, such as the degree of entry barriers and the degree of substitutability between the entrant’s and the enterprise’s products, efficiency, user’s countervailing bargaining power, and extraordinary circumstances to assure consumer interests.

 

The JFTC has published guidelines detailing sorts of conduct that are deemed exclusionary private monopolisation.

3. Remedies and sanctions

The JFTC has the power to issue cease and desist orders as well as a surcharge payment order (Article 7 and Article 7-2(4) of the AMA). Both are administrative in nature. There are currently no commitment-like type decisions in force in Japan. A commitment procedure was introduced to the AMA in December 2016, which has not yet come into effect.

 

Note that although the basic methodology for the calculation of surcharges is similar to that for cartels, there are several differences.

 

Regarding criminal sanctions any person (a director, an officer or an employee of a judicial person) that has undertaken a private monopolisation shall be punished by imprisonment of up to five years or by a fine of up to five million yen (Article 89 of the AMA). Also, the said judicial person shall be punished by a fine of no more than 500 million yen (Article 95 of the AMA). Criminal punishment shall be imposed only when a criminal accusation is filed by the JFTC. Note that in the context of private monopolisation cases, the criminal provisions have not yet been exercised.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).