2019 New Year Message from Chairman Sugimoto
1. In the beginning of the year, I would like to wish a happy new year along with all my respected colleagues.
Having been reappointed as Chairman of the Japan Fair Trade Commission last March, I will continue to serve in that role in the coming years. Again, I would like to ask for your continued support, guidance, and encouragement with regard to enhancing competition policy.
I have been advocating “competition policy for the new age” ever since I first took office as Chairman. The Japanese economy is facing changes in demographics such as population decline, a low birth rate and an aging society. It is also facing a reality in which conventional forms of demand have fully matured and are approaching saturation. Against this background, achieving an increase in demand by realize new products, services and kinds of business through innovation happen is considered to be a key factor for developing the economy, securing employment, and increasing benefits for consumers. Therefore, I believe that the anticipated competition policy for the new age should be the one that will remove barriers to free and fair competition, and provide an environment that will promote innovation. If business operators continue to take on the challenge of discovering, developing, and fulfilling consumers' potential needs, making a break with the yoke of past experiences of success, and reform the existing business environment and practices, this will in turn increase competence and corporate value. I believe that providing an environment in which those incereases will happen is also one of the roles expected to the competition policy in Japan today.
This year, under such attitude, I want to continue to actively put forward competition policy and enforce the Anti-Monopoly Act in a rigid manner, by making full use of the newly introduced system regarding Commitment Procedures, and by strictly responding to cartels and bid riggings, etc. Especially, based upon the Report of the Study Group on the Antimonopoly Act released on April 25th 2017, I will deal with issues derived from inflexibility in calculating amount of surcharge, and proceed with the examination with amendment of Antimonopoly Act, which contains rectification of surcharge system so as to incentivize investigated parties to corporate with authority’s investigation procedure.
2. With the digitization of the economy, digital platform operators are beginning to have a large impact on our everyday lives and business activities. Therefore, we need to monitor their conduct with close interest to determine under what circumstances they could be hindering competition.
Last year, together with the Ministry of Economy, Trade and Industry and the Ministry of Internal Affairs and Communications, we launched the Study Group for the Improvement of the Trade Environment Involving Digital Platform Businesses, and examined various country's systems pertaining to digital platform operators and the related issues and responses in Japan.. As a result, we established and published fundamental principles to address the issues regarding providing rules in response to the rise of digital platform businesses. On the basis of this, the Japan Fair Trade Commission will conduct market studies regarding matters such as problems with competition policy, with a particular focus on trade practices involving digital platform operators.
3. From the perspective of globalization of corporate activities, I believe the Japan Fair Trade Commission should put competition policy forward consistent with global standards, together with other competition authorities.
Last November, in Tokyo, the Japan Fair Trade Commission hosted the International Competition Network (ICN: an international gathering of competition-related authorities) Merger Workshop, and discussed matters such as how merger review in a digital economy should be like or challenges globalization will bring for merger review. This year, too, I would like to continue to exchange information and discuss matters with the other competition authorities, for example through OECD and ICN conferences and bilateral meetings between such authorities.
4. In addition, it is also an extremely important and essential role of the Japan Fair Trade Commission to keep an eye on whether new challenges to enter into market are wrongfully impeded, or whether innovation is being suppressed as a result of abusive conduct.
Last June, we released survey results that included those for the follow-up to the report on the Issues Concerning Competition Policy in the Mobile Phone Market (released in August, 2016). The report explains the point of view of competition policy regarding matters such as “two-year term commitment” and “four-year term commitment” seen in mobile phone transaction. This year, I would like to conduct market studies on the distribution of second-hand portable devices, together with the Ministry of Internal Affairs and Communications, regarding issues which were pointed out in a report presented by the Regulatory Reform Promotion Council last November.
Since last year, we have also been conducting another market study regarding requests from major companies to provide intellectual property and know-how that small and medium sized enterprises own. We plan to compile the results in the near future.
5. Moreover, this year, I want to continue to respond rapidly and accurately to conducts that are unjustly prejudicial to the interests of small and medium sized enterprises. In particular, with consumption tax scheduled to be raised from 8% to 10% in upcoming October, we must adopt a strict enforcement attitude on violations of the Act Concerning Special Measures for Pass on of Consumption Tax. The Japan Fair Trade Commission wants to continue to tenaciously promote activities including advocacy activities to prevent conduct such as refusal to shift consumption tax, and giving guidance on necessary improvements to business operators who have committed any malpractice. Since last year, we have also been working jointly with the Small and Medium Enterprise Agency to conduct a market study regarding business practice pertaining to molds.
6. And now, to close, in Japan, the era of a new Emperor will begin this May. With a view toward the coming new age, I believe we need to pursue competition policy that represents a response to current economic and social changes. I would like to conclude my New Year's greeting by expressing my hope that the coming year brings health and growth to you all.
Kazuyuki Sugimoto
Chairman
Japan Fair Trade Commission
