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Message from Chairman(January 2015)

2015 New Year Message from Chairman Sugimoto

1. I would first like to wish a happy new year to all my respected colleagues. This is my second celebration of New Year as the chairman of the Japan Fair Trade Commission (JFTC). Since taking office in March 2012, I have enjoyed every occasion to inform my colleagues of the challenges that the JFTC is facing. These challenges are mainly grouped around three areas: i. We strive to ensure a rigorous and effective enforcement of the Anti-Monopoly Act against anti-competitive conduct, such as price cartels and bid-riggings; ii. We seek to ensure competition advocacy that actively creates a free and fair market environment: iii. We aim to develop international cooperation to allow the JFTC to promptly and effectively respond to the globalization of enterprise activities. In 2015, the JFTC is determined to continue tackling these challenges.

The Japanese economy is on a moderate recovery, while some weakness can be seen in private consumption. In order to ensure the end of deflation and to encourage a sustainable upturn, it is crucial to increase the productivity of the Japanese economy as a whole, through tangible actions by enterprises that explore innovation, and to ensure that the fruits of this growth benefit people’s standard of living as soon as possible. Competition policies are designed to secure a market mechanism which benefits enterprises when their business effectiveness is improved, and for such improvements to lead to an increase of consumer benefits, exemplified in goods and services with high quality and at a low price. Such measures are the foundation of the indispensable infrastructure for economic growth. As a competition authority, the JFTC will support sustainable economic growth by securing a free and fair competition environment.

2. The task of building a competitive environment is challenging, especially in sectors highlighted by the Growth Strategy as areas in which high growth is expected: social welfare, agriculture, medical care, energy and infrastructure construction. With respect to sectors such as digital economy or intellectual property, innovation driving economic growth is expected, while at the same time their market environments are changing at an extremely rapid pace. It is necessary to clearly identify the true status of these sectors which have been becoming far more complex, in order to build a competitive environment appropriate to each sector.

The JFTC has also been rigorously making efforts to tackle problems in these sectors. Last year, for instance, the JFTC took action against cases concerning Overhead Transmission Line Works and Underground Transmission Line Works, Snow-Melting Equipment for Engineering Work for Shinkansen, International Shipping Services, Voluntary Flu Shot Services and Agricultural Cooperatives. In 2015, the JFTC will strive for the rigorous and effective enforcement of competition law. In terms of competition advocacy to actively create a competitive environment, the JFTC deems that, together with law enforcement, they act as “a pair of wheels”, and will therefore deliver its message for competition advocacy to every stake holder. Last year, the JFTC conducted a survey on the state of the childcare sector. The childcare sector in Japan is expected to qualitatively and quantitatively increase its level of service to the extent that it can be a growing sector in the Japanese economy. The JFTC published the report on the results from the survey and the recommendations from the viewpoint of competition policy, and has energetically conducted the report announcement activities through briefings for local governments and seminars for consumers. The JFTC also confirmed its intention to continue all efforts to make proposals to vigorously build competitive environment, with focus placed on sectors that are essential to the revitalization of the Japanese economy. The JFTC will also continuously support enterprises’ efforts to strengthen competition compliance. Furthermore, to secure a free and fair competition environment and to promote the efficiency and creativity of businesses’ responses to technological innovations and changes in market structures and the distribution system, the JFTC is to further clarify its views on such problems in order to offer accurate guidance to stake holders.

Needless to say, areas which the JFTC will tackle are not necessarily limited to the above. The JFTC is also determined to continue its strict enforcement against price cartels and bid-riggings which impact people’s everyday lives considerably, as well as abuses of superior bargaining position and business conducts against the Subcontract Act that cause small and medium-sized enterprises unjust damages.

3. The implementation of measures for the pass-on of Consumption Tax is a significant challenge for the Japanese Government. In line with this government policy, the JFTC has also been dealing promptly and strictly with practices impeding Consumption Tax pass-on. As you already know, last November, Prime Minister Abe announced that the Consumption Tax rate hike to 10 percent, which was originally planned for this October, will be postponed. The JFTC is determined to continuously endeavor to carry out prompt and strict responses based on the Act Concerning Special Measures for the Pass-on of the Consumption Tax because concerns about practices impeding the Consumption Tax pass-on still remain after the Consumption Tax hike last April.

4. From an international point of view, in the midst of accelerated globalization of business activities, a significant challenge for competition authorities is to deal quickly and effectively with international cartels and international merger reviews. The JFTC will actively work for the promotion of international cooperation and convergence in competition law through bilateral talks and multilateral frameworks such as ICN, OECD and others. In addition to that, the number of cases in which competition authorities exchange information in investigation has been increasing. In line with this trend, the JFTC will be engaged in building and developing cooperation frameworks such as the bilateral antimonopoly cooperation agreements, the economic partnership agreements and the MOUs to promote case enforcement cooperation further.

5. Finally, the revised Antimonopoly Act is scheduled to take effect this year. The revised Antimonopoly Act will abolish the JFTC’s hearing procedure and will replace it with a system in which any appeal suit pertaining to cease and desist orders and surcharge payment orders shall be subject to the exclusive jurisdiction of the Tokyo District Court. It will also introduce the new procedure for hearings prior to issuing cease and desist orders and surcharge payment orders. The JFTC will prepare ordinances and rules pertaining to the revised Antimonopoly Act without delay, in an effort to have the revised Antimonopoly Act come into force in April at the earliest.

On another note, the “Expert meeting on Investigative Procedures under the Antimonopoly Act” in the Cabinet Office discussed and examined the JFTC’s investigation procedures based on the supplementary provisions of the revised Antimonopoly Act and published its report last December. The JFTC will consider specific responses bearing in mind the contents of the report.

6. As already mentioned, this year, the JFTC will also be making maximum effort to fulfill its mission as a competition authority to enhance consumer benefits and stimulate the economy. As the New Year starts, I wish for you all happiness and growth.

Kazuyuki Sugimoto
Japan Fair Trade Commission

Japan Fair Trade Commission:

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