Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

There is a general tendency in Japanese competition law to reduce the number of exemptions available. Examples of this tendency can be seen from the abolition of the Exemption Act which provided for the granting of wide-ranging exemptions, the suppression of 35 different exemption systems existing under other Acts and the repeal of Article 21 of the Antimonopoly Act eliminating the exemption avail …

Exemptions

Article 2(6) of the AMA is modeled on Section 1 of the Sherman Act. It prohibits unreasonable restraints of trade, including cartel activities and bid-rigging. In this context, a cartel is defined as a joint action among competitors mutually agreeing on an element fundamental to competition - such as price, allocation of customers or suppliers - resulting in a substantial restraint of competition. Although the restraint has to be “substantial”, the Japan Fair Trade Commission (JFTC) has a loose assessment of the condition in the context of hardcore restraints. In its “Policy on Criminal Accusation and Compulsory Investigation of Criminal Cases Regarding Antimonopoly Violations” document, the JFTC defined price-fixing cartels, supply restraint cartels, market allocations, bid-rigging and group boycotts as vicious, i.e. hardcore, restraints.

An unreasonable restraint of trade is statutorily defined as conduct through which undertakings “in concert with other entrepreneurs, mutually restrict or conduct their business activities.” Thus, joint action is a required element of a claim for unreasonable restraint of trade.

With regard to vertical agreements between business entities operating at different levels of the production chain, the Tokyo High Court unequivocally held in Asahi Shimbunsha (6-9 Kosai Minshu 435, Tokyo High Court, 1953) that the prohibition on unreasonable restraints of trade applies only to horizontal restraints, not vertical restraints. Thereafter, the JFTC likewise adopted the view that unreasonable restraints of trade could only exist between competitors.

More recently, however, both the JFTC Guidelines (see Guidelines concerning distribution systems and business practices under the Antimonopoly Act of 11 July 1991, amended in 2017) and decisions by the Tokyo High Court have underlined that there are circumstances in which agreements between business entities not operating at the same level may be found to constitute unreasonable restraints of trade in the context of the Article 2 prohibition. In the 1993 Seal Bid-Rigging case, for example, the Tokyo High Court held that it “could not support the position that (...) these entities necessarily had to be on the same trading level” in order for an agreement to violate the AMA.

Despite the increasing application of the provisions on restrictive agreements to vertical agreements, many vertical restraints are still only considered anticompetitive under the heading of unfair practices.

The prohibition

There is a general tendency in Japanese competition law to reduce the number of exemptions available. Examples of this tendency can be seen from the abolition of the Exemption Act which provided for the granting of wide-ranging exemptions, the suppression of 35 different exemption systems existing under other Acts and the repeal of Article 21 of the Antimonopoly Act eliminating the exemption available to the electricity, gas and railroad sectors as well as any other sectors that could be characterized as natural monopolies.

Exemptions can broadly be ranged under two headings:

- the three exemptions available under the Antimonopoly Act;

- those exemptions available under other Acts.

Exemptions existing under the Antimonopoly Act concern:

- exercise of intellectual property rights (Article 21); pursuant to Article 21, the legitimate exercise of intellectual property rights is not considered to violate the provisions of the Antimonopoly Act;

- acts of partnerships between small businesses (Article 22); the scope of this exemption is limited to acts organizing mutual support and which are voluntary in nature;

- resale price maintenance agreements (Article 23); however, the scope of this exception is limited to products designated by the JFTC, namely copyright products, and products expressly exempted under statutory provisions.

Further, in the Oil Cartel case, the Japanese Supreme Court held that an exemption exists for cartel activity taken pursuant to legal administrative guidance by the government, where such conduct is not contrary to the public welfare (Oil Cartel, 38-4 Keishu 1287, Supreme Court, Feb. 24, 1984).

Exemptions available under other Acts cover certain conducts contemplated in other instruments, such as the Insurance Business Law, the Copyright Act, transport-related acts, etc.

Furthermore, the Guidelines concerning distribution systems and business practices under the Antimonopoly Act (the Distribution Guidelines, 1991, as amended in June 2017), try to maintain a balance between the need to guarantee that undertakings are not prevented from freely entering markets and the right of a head of network to freely and independently select its trading partners and set its prices at its discretion. The Guidelines define a free harbor for vertical non-price restrictions imposed by undertakings which have no “influence” on the market, i.e. undertakings not holding more than a 20% market share. Conversely, resale price maintenance is deemed automatically contrary to Article 2(9)(iv) of the Antimonopoly Act but can be exempted in exceptional circumstances where there are “justifiable grounds”. Henceforth, the practice must have actual pro-competitive effects, promote inter-brand competition and increase demand for the product thus benefiting consumers. In addition, the pro-competitive effects must not be able to be achieved with less restrictive alternatives.

Global Competition Law

1043. Exemptions

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Les notions juridiques connexes

1043. Exemptions

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise