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JFTC issues recommnendation etc. to Businesspersons Partincipating in Bidding on Construction Projects ordered by the Former City of Shimizu in Shizuoka Prefecture

November 13/2003
Japan Fair Trade Commission

The Japan Fair Trade Commission conducted an investigation based on the stipulations of the Antimonopoly Act that targeted businesspersons participating in bidding for civil engineering and paving work ordered by the City of Shimizu* and the Shimizu-shi Oshikirikita Tochikikakuseiri Kumiai (hereinafter referred to “the former City of Shimizu etc.”) of Shizuoka Prefecture. In completing this investigation, the JFTC hereby issues the following recommendation based on the stipulations of Section 48 Paragraph 2 of said Antimonopoly Act to 26 persons (hereinafter referred to as “the 26 persons”) stating that they are in violation of the stipulations of Section 3 (“prohibition of unreasonable restraint of trade”) of said Antimonopoly Act.

*The City of Shimizu in Shizuoka Prefecture was incorporated into the City of Shizuoka on April 1, 2003.

1. Concerned persons

a. Persons related to civil engineering work

Twenty-five persons conducting civil engineering work in the City of Shizuoka region (City of Shimizu, Shizuoka Prefecture until March 31, 2003) (hereinafter referred to as “the 25 persons”)

b. Persons related to paving work

Eleven persons conducting paving work in the City of Shizuoka region (City of Shimizu, Shizuoka Prefecture until March 31, 2003) (hereinafter referred to as “the 11 persons”)

2. Outline of violation

a. Persons related to civil engineering work

The 25 persons conspired to substantially restrict competition in civil engineering work ordered by the former City of Shimizu using general competitive bidding or selective competitive bidding that was limited to persons with an “A” rating in a manner that runs counter to public interest by prearranging the project contractors and having them receive relevant orders. This was intended to prevent a decline in order prices,beginning from a period to commence no later than June 1, 1999, for said projects.

b. Persons related to paving work

The 11 persons conspired to substantially restrict competition in paving work ordered by the former City of Shimizu using the selective competitive bidding method in a manner that runs counter to public interest by prearranging project contractors and having them receive relevant orders. This was intended to prevent a decline in order prices, beginning from a period to commence no later than June 1, 1999, for said projects.

3. Outline of elimination measures

a. Persons related to civil engineering work

i. The 25 persons shall confirm that they have stopped the activities mentioned in item 2a above.
ii. The 25 persons shall notify the City of Shimizu* and the Shimizu-shi Oshikiri Kitatochi Kukaku Seiri Kumiai of the measures that they shall take based on item 3a(i) above as well as their pledge to not conduct actions similar to those mentioned in item 2a above in the future.
iii.The 25 persons shall not engage in activities similar to these described in item 2a above in the future.

b. Persons related to paving work

i. The 11 persons shall confirm that they have stopped the activities mentioned in item 2b above.
ii. The 11 persons shall notify the City of Shimizu* and the Shimizu-shi Oshikiri Kitatochi Kukaku Seiri Kumiai of the measures that they shall take based on item 3b(i) above as well as their pledge to not conduct actions similar to those mentioned in item 2b above in the future.
iii.The 11 persons shall not engage in activities similar to these described in item 2b above in the future.

4. Request to the Associated General Contractors of Shimizu City

The Associated General Contractors of Shimizu City (hereinafter referred to as “the Association”) had received a decision on infringement of the Antimonopoly Act on September 8, 1982.

The JFTC found the following with regard to the 26 persons: a) almost all are Association members; b) they held meetings to determine designated contractors using an Association meeting room; and c) when necessary, the 26 persons determined designated contractors after receiving advice from a managing supervisor of a business to which an Association executive is affiliated. Thus, the JFTC has requested that the Association take measures to ensure that its members are fully aware of the content of the Antimonopoly Act so that similar activity does not occur again.

5. Limitation of acceptance or rejection of this Recommendation

November 28, 2003
(If the recommendation is accepted by the 26 persons, a decision consisting of the same items contained in this recommendation shall be issued; if not, hearing procedures shall commence.)

*Every announcement is tentative translation. Please refer to the original text written in Japanese.



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