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Message from Chairman(January 2017)

2017 New Year Message from Chairman Sugimoto

1. In the beginning of the year, I would like to wish a happy new year with all my respected colleagues. In order to make society more vibrant through free and innovative activities by businesses, it is essential for the Japan Fair Trade Commission (JFTC) to take the key role of promoting competition policy vigorously. Particularly in a Japanese society where the population size is decreasing, it is vital for sustainable economic growth by encouraging innovation through dynamic competition. This year we will continue to firmly fulfill our duty as a competition authority to ensure fair and free competition considering the significance of competition policy in encouraging economic growth.

2. Looking at the current situation of the Japanese economy, the so-called Fourth Industrial Revolution including the utilization of Internet of Things (IoT), Artificial Intelligence (AI), and Big Data is starting to spread out. With the expansion of the fields of the digital economy by the day, new business models such as platform-type business are appearing one after another. In such fields, a monopoly on information can give certain companies a dominant position, and it is conceivable that some kinds of corporate behavior impedes fair competition, so we think ongoing monitoring of such behavior is necessary. In light of these circumstances, last year the JFTC established a contact point in the Investigation Bureau for gathering information concerning suspected violations of the Antimonopoly Act in IT/digital-related fields.
 It is important to make market mechanisms work more effectively in regulated industries. Last year we established contact points for gathering information concerning the agriculture sector and electric power trade sector. Not only keep working on typical violations such as cartels and bid-riggings, but also we are going to actively work on issues of anti-competitive unilateral conducts in order to promote and maintain competitive markets.
 Additionally, the new system on appeal procedure as to the orders by the JFTC is now in full operation, while abolishing the hearing procedure for cease-and-desist orders and surcharge payment orders as an appeal procedure within the JFTC. And, the recipient of the order brings an appeal straight to the Tokyo District Court. Under these circumstances, I believe that it is necessary to continue to strictly enforce the law while ensuring justice and fairness in the investigation activities based on the guidelines on investigation procedures formulated in December 2015.

3. Last year, in addition to handling cases, from the perspective of improving the environment for Fair and Free Competition, the JFTC conducted surveys on conditions in sectors such as elderly care sector and mobile phone sector. In the future, we will carry out more surveys in the fields including the ones where innovation is accelerated and the ones where high growth is expected. Also, we will provide guidance from the view point of competition policy on trade practices and ways of regulations.
 In order to improve the situations in the markets for competition, the JFTC is also tasked to set, revise, and disseminate guidelines. We are considering in detail review of the "Guidelines Concerning Distribution Systems and Business Practices under the Antimonopoly Act" ("Distribution and Business Practices Guidelines"), taking into consideration the advice of the "Report of the Study Group on Competition Policy for Distribution Systems and Business Practices" completed in December 2016 and opinions from various stakeholders. In anticipation of economic circumstances that change along with the times, we are working on greater transparency in the decision making process under the Antimonopoly Act. We consider it necessary to set, revise, and disseminate various types of guidelines to ensure predictability for businesses and to prevent violations Antimonopoly Act.

4. It will be a driving force for the further growth of Japanese economy to have small and medium sized enterprises taking on stronger management vitality and higher productivity. Last year as well, in addition to conducting swift and effective enforcement of the Subcontract Act, the JFTC greatly added examples of violation cases in the Subcontract Act's guidelines in order to improve the situations on transaction conditions for small businesses. Also, the JFTC worked for improvement of subcontracting transactions, such as ruling cash payment as a general practice, through a joint statement of the request with the Small and Medium Enterprise Agency. Additionally, we have been working on properly passing-over the consumption tax, such as handling cases of nonpayment.
 We will actively pursue such proper imputation this year as well, dealing strictly with transactions that unfairly disadvantage small and medium sized enterprises.

5. In our society, business activities are getting more and more globalized, and there exist increasing needs to detect and deter international cartels and to review international mergers and acquisitions. In this situation, it is increasingly important to build systems of cooperation with competition authorities in other countries. We work on daily basis to build and promote systems for sharing information with foreign competition authorities, through bilateral talks and multinational frameworks such as ICN, OECD, and UNCTAD. In addition, we are assisting competition authorities, etc., in developing countries that are adopting or strengthening competition laws by dispatching official of the JFTC to share our experiences with them, contributing to the adoption and strengthening of such laws. In the future, we will continue to build cooperative frameworks through information exchange with and technical support of foreign competition authorities.

6. Our upcoming challenge on competition policy is the review of legal framework of Antimonopoly Act. One of the related important movement is the approval of the Trans-Pacific Partnership (TPP) Agreement and passage of the Bill to amend the laws related to the Trans-Pacific Partnership in last year's extraordinary Diet session. The TPP Agreement Development Act includes revision of the Antimonopoly Act to adopt the so-called commitment procedure. I consider the commitment procedure, enabling swift resolution of cases and contributing to the early restoration of Fair and Free Competition, to be an effective tool for enforcing the Antimonopoly Act.
 Additionally, in light of today's globalization, diversification, and complexification of economic activities and corporate forms, the Study Group on the Antimonopoly Act meets to examine the proper form for the surcharge payment order system, etc. In the future, we will consider the design of a detailed system taking into account the study group's report.

7. This year as well, the JFTC will firmly fulfill its duty as a competition authority to ensure Fair and Free competition. In conclusion, I ask for your continued support and encouragement, and I wish you growth and good health throughout the year.

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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