Inaugural Message from Chairman (September 2020)
September 2020
My name is Kazuyuki Furuya, and I was appointed as the Chairman of the Japan Fair Trade Commission (“JFTC”). I assume the significant responsibility of ensuring the proper management of competition policy.
First of all, I would like to state my attitude on my duty.
The economic and social environment surrounding Japan is undergoing dramatic changes. As globalization and digitalization progress rapidly, Japan is now facing challenges of declining population and birthrate, aging population, and widening disparities. Against the backdrops, Japan has to maintain vitality of its economy and society. I believe that it is extremely important for the JFTC to fulfill its mission of protecting interests of consumers, creating environment for stimulating innovation, and thereby revitalizing the Japanese economy through promoting fair and free competition. The JFTC's endeavors to implement competition policy, including an enforcement of the Antimonopoly Act (“AMA”), aiming to ensure the fair market and thus vitalizing economic activities. Competition policy is an important basis of promoting and supporting the sustainable development of the Japanese economy.
In addition, due to the impact of the COVID-19 outbreak, economic activities have been stagnant, and especially small and medium-sized enterprises have faced severe economic hardships. Under these circumstances, I believe that strict and proper enforcement of the AMA and other relevant laws that enhance fair and free competition, and promotion of competition policy are becoming more essential for maintaining the vitality of the Japanese economy and the prosperity of the people.
Under the leadership of former Chairman, Kazuyuki Sugimoto, the JFTC has been actively involved in new economic and social trends, including the digitalization of the economy and diversification of working styles, and has been expanding its contribution from the perspective of competition policy. I believe that strict enforcement of the AMA and promotion of competition policy to create a fair and free market environment are the two wheels of the JFTC’s mission. I would like to carry on the efforts of former Chairman Sugimoto.
Next, I would like to point out several specific measures.
Firstly, it is important to ensure rigorous and effective enforcement of the AMA. Strict enforcement of the AMA against violations contributes to the revitalization of the economy and the promotion of consumer welfare. Therefore, the JFTC must take vigorous stance on cartels and bid riggings, which have a huge influence on people’s welfare. In addition, the JFTC will review mergers and other business combination cases in prompt and appropriate manners.
Secondly, in order to promote fair trade practices, it is necessary to strictly regulate conducts that may unjustly cause disadvantages to small and medium-sized enterprises. The JFTC will not tolerate such conducts, including abuses of superior bargaining positions, predatory pricing, other types of unfair trade practices, and violations of the Subcontract Act. As I mentioned at the beginning of this message, the business environment surrounding small and medium-sized enterprises is becoming more challenging due to the impact of COVID-19. Under these circumstances, The JFTC needs to tackle such conducts strictly while taking measures to prevent such practices.
In addition, as described in the Growth Strategy for 2020, the JFTC is required to formulate guidelines or take other measures regarding the application of the AMA and the Subcontract Act against practices related to freelancers and start-ups. The JFTC will proceed with its consideration on these measures.
Furthermore, with the increase in the consumption tax rate on October 2019, it is important to ensure smooth and proper pass-on of the consumption tax by taking prompt and strict measures against refusals of the tax pass-on, in accordance with the Act Concerning Special Measures for Pass-on of Consumption Tax.
Thirdly, with the digitalization of the economy, improving the competitive environment in fields where "information" is processed as business resources to promote innovation is essential for promoting innovation. The JFTC will continue to conduct surveys related to digital platforms and consider perspectives under the AMA and competition policy. The JFTC will also take strict measures against anti-competitive behaviors by digital platform operators.
In September 2019, the Headquarters for Digital Market Competition were established in the Cabinet Secretariat to improve the competitive environment in the digital field, and the government has been working on it. The JFTC would like to contribute to these approaches through actively participating in the discussion.
In addition to the digital fields, it is becoming more important to improve sound competitive environment in other fields in order to encourage competitive behaviors of enterprises. For contributing to the improvement of compliance with the competition law, the JFTC will conduct surveys and make proposals on specific industries.
Fourthly, the amendment to the AMA was enacted during an ordinary Diet session last year. The amendment includes the new leniency policy, where rates of surcharge may be reduced according to the degree of cooperation for JFTC’s investigation, while the JFTC introduces an approach to so-called “attorney-client privilege.” The JFTC will prepare for implementing the amended AMA properly.
Last but not least, as more and more enterprises operate internationally in accordance with the rapid globalization of the economy in recent years, competition authorities are facing an increasing need for cooperation with each other in the area of law enforcement, such as in investigating international cartels and reviewing international mergers. In addition to the law enforcement, international cooperation among competition authorities through bilateral or multilateral frameworks is becoming more important. The JFTC will make contributions to activities in these frameworks.
I have stated five issues that I would like to focus on as the Chairman. I will continue to work with the four commissioners to achieve the mission of the JFTC, while listening to opinions from relevant parties. We would highly appreciate your continued supports and encouragement.
