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JFTC issues Recommendation to Companies Bidding for the Tire Tubes Ordered by the Japan Defense Agency

December 24/2004
Japan Fair Trade Commission

The Fair Trade Commission of Japan (hereinafter “JFTC”) investigated into companies that bid for the tires or the tubes requested by the Japan Defense Agency (hereinafter “JDA”) based on the provisions of the Antimonopoly Act, and today issued recommendation to the 10 companies as they are in violation of the provisions of Section 3 of the Act (unreasonable restraint of trade) based on Section 48 (2) of the Act (see below 1-4). The JFTC requested the JDA to continue to take measures mentioned in 5 below.

 1. Concerned Parties (see attachment 1 and 2)
(1) Companies participating in bids for air-inflated tires for aircrafts ordered by the JDA and whose procedures on contracts are carried out by Contract Headquarter of the JDA through a competitive bid by themselves or on behalf of their related manufacturers: 4 companies

(2) Companies participating in bids for air-inflated tires and tubes for other than aircrafts ordered by the JDA and whose procedures on contracts are carried out by Contract Headquarter of the JDA through a general competitive bid by themselves or on behalf of their related manufacturers: 10 companies

 2. Outlines of Violation
(1) For air-inflated tires for aircrafts mentioned in 1 (1) above
The four companies conspired to substantially restrict competition in the trading field of air-inflated tires for aircrafts ordered by JDA and whose procedures on contracts are carried out by Contract Headquarter of the JDA through a competitive bid, against the public interest by jointly deciding on which company would accept the order and having them receive it in a bid, to equalize the chance of getting contracts and to prevent prices for orders from falling, starting 17 July 2001 at the latest.

(2) For air-inflated tires and tubes for other than aircrafts mentioned in 1 (2) above
The ten companies conspired to substantially restrict competition in the trading field of air-inflated tires and tubes for other than aircrafts ordered by JDA and whose procedures on contracts are carried out by Contract Headquarter of the JDA through a general competitive bid, against the public interest by jointly deciding on which company would accept the order and having them receive it in a bid, to equalize the chance of getting contracts and to prevent prices for orders from falling, starting 31 July 2003 at the latest.

 3. Summary of Measures to Eliminate the Violation
(1) The four companies mentioned in 2 (1) above and the ten companies mentioned in 2 (2) above should confirm that they refrained from the conducts described in 2 above at their board of directors.

(2) They should advise other companies and the Contract Headquarter of the JDA and make their employees know of the measures taken based on 3 (1) above and that they will refrain from any conduct similar to the conducts described in 2 above.

(3) They should refrain from any conduct similar to the conducts described in 2 above in the future.

(4) Bridgestone Corporation, Yokohama Rubber Co., Ltd., Sumitomo Rubber Industries, Ltd. and Toyo Tire and Rubber Co., Ltd. should take necessary measures to provide training in the Antimonopoly Act to their marketing staff of their tires and tubes and to have their legal staff conduct periodical audits.

 4. Deadline for accepting or rejecting the recommendation
11 January 2005
(If the recommendation is accepted, a decision consisting of the same items contained in this recommendation shall be issued; if not, hearing procedures shall commence.)

 5. Request to the Japan Defense Agency
The JFTC requested the JDA to continue to take measures reported by Procurement Implementation Headquarter of the JDA (currently the Contract Headquarter of the JDA) on its procurement to the JFTC in 2000.

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



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