Japan Fair Trade Commission
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Chapter I General Provisions

Article 1

The purpose of this Act is to promote fair and free competition, stimulate the creative initiative of enterprise, encourage business activity, heighten the level of employment and actual national income, and thereby promote the democratic and wholesome development of the national economy as well as secure the interests of general consumers by prohibiting private monopolization, unreasonable restraint of trade and unfair trade practices, preventing excessive concentration of economic power and eliminating unreasonable restraints on production, sale, price, technology, etc. , and all other unjust restrictions on business activity through combinations, agreements, etc.

Article 2

(1) The term "enterprise" as used in this Act means a person who operates a commercial, industrial, financial or other business. Any officer, employee, agent or other person who acts for the benefit of any enterprise is deemed to be an enterprise with regard to the application of the provisions of the following paragraph or of Chapter III.

(2) The term "trade association" as used in this Act means any combination or federation of combinations of two or more enterprises having as its principal purpose the furtherance of their common interests as enterprise and includes the following; provided, however, that a combination or federation of combinations of two or more enterprises which has capital or contributions made by the constituent enterprise, and whose principal purpose is to operate and which is actually operating a commercial, industrial, financial or other business for profit is not included:

(i) any incorporated association or other association of which two or more enterprises are members (including the equivalent thereof)

(ii) any incorporated foundation or other foundation for which two or more enterprises control the appointment and dismissal of officers or managers, the management of business or continuation of its existence

(iii) any partnership for which two or more enterprises are partners, or any contractual combination of two or more enterprises.

(3) The term "officer" as used in this Act means an officer, an executive officer, a managing member, an inspector, an auditor, or an equivalent thereof, a manager, or a chief of business of the main or branch office.

(4) The term "competition" as used in this Act means a state in which two or more enterprises, within the normal scope of their business activities and without making any material change to the facilities for, or kinds of, such business activities, engage in, or are able to engage in, any act listed in the following items.

(i) supplying the same or similar goods or services to the same user

(ii) receiving supplies of the same or similar goods or services from the same supplier

(5) The term "private monopolization" as used in this Act means such business activities, by which any enterprise, individually or by combination, in conspiracy with other enterprises, or by any other manner, excludes or controls the business activities of other enterprises, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade.

(6) The term "unreasonable restraint of trade" as used in this Act means such business activities, by which any enterprise, by contract, agreement or any other means irrespective of its name, in concert with other enterprises, mutually restrict or conduct their business activities in such a manner as to fix, maintain or increase prices, or to limit production, technology, products, facilities or counterparties, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade.

(7) The term "monopolistic situation" as used in this Act means circumstances in which each of the following market structures and negative effect in the market exist in any particular field of business when the aggregate total value (this term refers to the prices of the relevant goods less an amount equivalent to the amount of taxes levied directly on such goods) of goods of the same description (including goods capable of being supplied without making any material change to the facilities for, or kinds of, such business activities; hereinafter referred to as "Particular Goods" in this paragraph) and those of any other goods having an extremely similar function and utility thereto, which are supplied in Japan (excluding those exported), or the total value (this term refers to the prices of the relevant services less an amount equivalent to the amount of taxes levied on the recipient of such services with respect thereto) of services of the same description which are supplied in Japan, during the latest one-year period designated by Cabinet Order, exceeds one hundred billion yen:

(i) a single enterprise' share of a field of business (meaning, out of the aggregate volume (if calculation in terms of volume is not appropriate, out of the aggregate value; hereinafter the same applies in this item) of the Particular Goods and any other goods with an extremely similar function and utility that are supplied in Japan (excluding those exported), or out of the aggregate volume of the services that are supplied in Japan, the ratio of Particular Goods and any other goods with an extremely similar function and utility or services that are supplied by the enterprise; hereinafter the same applies in this item) exceeding one-half or two enterprise' combined share of a field of business exceeding three-fourths during the relevant one-year period.

(ii) the existence of conditions that make it extremely difficult for any other enterprise to newly enter the relevant particular field of business.

(iii) the existence of a remarkable increase or of a slight decrease in the price of the Particular Goods or services supplied by the relevant enterprise during a considerable period of time in light of the changes in supply and demand, and changes in the cost of supply, for the Particular Goods or services, and the enterprise falling under any of the following items during the period.

(a) that the enterprise has made a profit at a rate far exceeding the profit rate specified by Cabinet Order as the standard for the business type specified by Cabinet Order to which the relevant enterprise belongs

(b) that the enterprise has expended selling and general administrative expenses which are considered to be far exceeding the standard selling and general administrative expenses for the field of business to which the relevant enterprise belongs

(8) If a change in economic conditions results in an extreme change in domestic shipments from producers and wholesale prices, the amount in the preceding paragraph is separately provided for by Cabinet Order, in consideration of such conditions.

(9) The term "unfair trade practices" as used in this Act means an act falling under any of the following items:

(i) engaging, without justifiable grounds, in any of the following acts, in concert with a competitor:

(a) refusing to supply to a certain enterprise or restricting the quantity or substance of goods or services supplied to a certain enterprise

(b) causing another enterprise to refuse to supply a certain enterprise, or to restrict the quantity or substance of goods or services supplied to a certain enterprise

(ii) unjustly and continually supplying goods or services at a price applied differentially between regions or between parties, thereby tending to cause difficulties to the business activities of other enterprise

(iii) without justifiable grounds, continuously supplying goods or services at a price far below the cost incurred to supply them, thereby tending to cause difficulties to the business activities of other enterprises

(iv) supplying goods to another party who purchases the relevant goods from oneself while imposing, without justifiable grounds, one of the restrictive terms listed below:

(a) causing the party to maintain the selling price of the goods that one has determined, or otherwise restricting the party's free decision on selling price of the goods

(b) having the party cause an enterprise that purchases the goods from the party maintain the selling price of the goods that one has determined, or otherwise causing the party to restrict the relevant enterprise's free decision on the selling price of the goods.

(v) engaging in any act specified in one of the following by making use of one's superior bargaining position over the counterparty unjustly, in light of normal business practices:

(a) causing the counterparty in continuous transactions (including a party with whom one newly intends to engage in continuous transactions; the same applies in (b) below) to purchase goods or services other than those to which the relevant transactions pertain

(b) causing the counterparty in continuous transactions to provide money, services or other economic benefits

(c) refusing to receive goods in transactions with the counterparty, causing the counterparty to take back such goods after receiving them from the counterparty, delaying payment to the counterparty or reducing the amount of payment, or otherwise establishing or changing trade terms or executing transactions in a way disadvantageous to the counterparty

(vi) any act falling under any of the following items, which tends to impede fair competition and which is designated by the Fair Trade Commission, other than the acts listed in the preceding items:

(a) unjustly treating other enterprise in a discriminatory manner

(b) engaging in transactions at an unjust price

(c) unjustly inducing or coercing the customers of a competitor to deal with one

(d) dealing with another party on such conditions that will unjustly restrict the business activities of the counterparty

(e) dealing with the counterparty by making use of one's superior bargaining position unjustly

(f) unjustly interfering with a transaction between an enterprise in competition with one in Japan or a corporation of which one is a shareholder or an officer and another transaction counterparty; or, if such enterprise is a corporation, unjustly inducing, instigating or coercing a shareholder or officer of such corporation to act against the corporation's interests.



Japan Fair Trade Commission:

100-8987 1-1-1 Kasumigaseki, Chiyoda-ku, Tokyo,Japan
Tel: +81-3-3581-1998
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