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.

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Criminal cases have played an important role in the development of Japanese case law regarding cartels. In June of 1990, the JFTC announced a policy of actively pursuing criminal prosecution of cartels. The District Courts have original jurisdiction over violations of the criminal provisions set forth in Articles 89 et seq. of the Antimonopoly Act (AMA).
Failure to respond to a summons during inve …

Criminal sanctions

  The JFTC has authority to order measures necessary to eliminate violations of the Antimonopoly Act. In order to remedy cases of private monopolization, the JFTC has for example ordered the dissolution of an association, issued prohibitions on holding stock, interfering in business activities or with personnel, issued prohibitions on restricting production of goods, refusing transactions, discrimination or requiring resale prices.

  With regard to unreasonable restraints of trade, the JFTC has ordered, inter alia, dissolution of the cartel, prohibited future illegal acts and termination of executed acts. The JFTC has penalized unfair trade practices by prohibiting illegal shipping restrictions, rebates, and general trade interference. Also, where necessary, it has not hesitated to cancel contracts, to require the withdrawal of requests or instructions or order the resignation of officers. Where it deems it appropriate, it has ordered the public announcement of the measures to be taken.

  The existence of a monopolistic situation is not in itself considered an anticompetitive act. Nevertheless, under the Antimonopoly Act, the JFTC has authority, where necessary, if investigation and hearings reveal that certain stringent criteria are satisfied, to take measures to counter a monopolistic situation. As we have seen, this can include ordering that a portion of a business be spun off or other measures necessary to restore competition.

Cease-and-desist orders

In order to eliminate any economic benefit deriving from the formation of cartels, the JFTC imposes administrative fines or “surcharges” intended both to divest the cartel of its unjustly acquired profits and to suppress the cartel. Behavior subject to surcharges includes not only cartels or monopoly by control, but also monopoly by exclusion, abuse of a dominant bargaining position and certain types of unfair trade practices (concerted refusal to trade, discriminatory pricing, unjust low price sales and resale price restrictions).

Surcharges are calculated according to prescribed formulas that were revised pursuant to amendments to the AMA passed on 19 June 2019, in order to increase the deterrent effect of sanctions. The amount of a fine is the turnover achieved during the prosecution period multiplied by a fixed percentage. The basis of calculation of the surcharge was previously three years of turnover. Following the 2019 amendments, it will be increased to up to ten years. In addition, the turnover taken into account will include the turnover achieved by the group of undertakings to which the offender belongs. Before the amendments, for cartels the multiplier was greater for manufacturers (10%) than for retail (3%) or wholesale businesses (2%). From the entry into force of the 2019 amendments (which is expected to occur before 25 December 2020), a single rate will apply irrespective of the type of business. In addition, under the new rules, repeat offenders will incur a surcharge raised by 150% if they commit the same infringement within a period of ten years. Leaders of the cartel (those who originated the cartel, incited others to join or to obstruct the investigation) will also see their surcharge increased by 150%. The previous cases of reduction of the fine by 20% were also repealed.

If a party does not agree the terms of the surcharge ordered against it, it may request a hearing within sixty days upon receiving the official payment order. The JFTC will consider the legitimacy of the request prior to deciding whether to grant the party a right to a hearing. If a hearing is granted, thereafter the JFTC adopts a new decision deciding whether or not to require the party(ies) to pay a surcharge.

Fines

Under Japan's program (Action 7-2 of the AMA), a total of five undertakings could apply for leniency before the JFTC, by reporting the cartel and providing useful information. Five applications were allowed before the JFTC launched an investigation, and up to three undertakings could apply after the investigation was initiated, if the total of five undertakings was not exceeded. The 19 June 2019 amendments to the AMA changed those rules to enhance the incentives of undertakings to apply for leniency. Under the new system, which is expected to come into force before 25 December 2020, cooperation of the undertaking during the investigation may significantly increase the amount of the fine reduction provided by the leniency program. The JFTC will no longer be limited in the number of undertakings which can benefit of the leniency program. 

The amount of the fine reduction granted to others than the first applicant will depend on various factors: their rank, whether they come forward before or after the investigation starts and the extent of their cooperation, which is assessed based on three factors: the detail of the materials provided, the relevance of the information provided for the investigation, the existence of supporting documents.

Based on the rank of the application, the first undertaking to apply before the investigation starts is awarded full immunity, the second a 20% reduction, the third to fifth a 10% reduction and the following undertakings a 5% reduction. Based on their contribution to the investigation, the second and following applicants may be granted an additional reduction of up to 40%. Lower amounts of reduction are granted where the undertakings come forward after the investigation begins.

The JFTC made the public announcement that the first applicant for leniency before the investigation starting date and its employees will also be immune from criminal prosecution (JFTC's Policy on Criminal Accusation and Compulsory Investigation of Criminal Cases Regarding Antimonopoly Violations, 7 October 2005). 

Leniency

Criminal cases have played an important role in the development of Japanese case law regarding cartels. In June of 1990, the JFTC announced a policy of actively pursuing criminal prosecution of cartels. The District Courts have original jurisdiction over violations of the criminal provisions set forth in Articles 89 et seq. of the Antimonopoly Act (AMA).

Failure to respond to a summons during investigation may be enforced by recourse to criminal sanctions.

An individual found liable for private monopolization, unreasonable restraint of trade or a substantial restraint of competition by a trade association (or for attempting such crimes) can be punished by imprisonment of up to five years or fined 500 million yen (US$ 4.7 million). Employees of the undertaking may also be punished by a sentence of five years imprisonment and a fine of up to 5 million yen (US$ 47,386). There are also criminal penalties for failure to act, such as taking no action to prevent a known violation of the Antimonopoly Act or failure to eliminate a known violation of the AMA.

Criminal sanctions are also available for agreements substantially restricting competition where these offenses are serious or likely to have a widespread effect. Criminal sanctions are likewise available against firms that are repeat offenders, or where administrative sanctions are deemed insufficient. No criminal sanctions are available for violations of the provisions on unfair trade practices.

     An individual harmed by a violation of the Antimonopoly Act can seek compensation under the strict liability provisions of the Act, as well as under Section 709 of the Civil Code which provides for general tort claims. Such actions are available both to the party directly affected by the illegal transaction and to general consumers who are indirect purchasers of goods. A private action for damages under the provisions of the Antimonopoly Act cannot be asserted in the court, however, until the JFTC has handed a final and binding cease-and-desist order. The Tokyo High Court has original jurisdiction over such suits for compensation of damages under Article 25.

  Furthermore, persons injured or likely to be injured by unfair trade practices are entitled to seek a court injunction for the suspension or prevention of such infringements. The right to an injunction exists with respect to violation of Articles 19 (unfair trade practices) and 8(v) (trade associations causing business entities to use unfair trade practices). When an action seeking an injunction is filed in the Tokyo High Court, the Court will notify the JFTC and can request the JFTC's opinion.

No undertaking, even if it was able to benefit from the leniency program, is immune from civil action.

Global Competition Law

1054. Criminal sanctions

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Les notions juridiques connexes

1054. Criminal sanctions

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