June 7, 2023
Japan Fair Trade Commission
(Special Study on Facilitation of Transferring Higher Costs)
I would like to talk that the Japan Fair Trade Commission (the JFTC) started to send the Questionnaire for the special study on efforts to facilitate the transfer of higher costs and made a request for proactive information provision related to "Abuse of Superior Bargaining Position" under the Antimonopoly Act.
Based on the results of the emergency study announced in December 2022, the JFTC launched the "Special Study" on May 30, 2023 as a further study to ascertain whether the price pass-through fitting in with raising costs has been taking place, in particular, the status of efforts to transfer higher costs related to higher labor costs, and of efforts made after sending written notices of caution related to "Abuse of Superior Bargaining Position" under the Antimonopoly Act.
This special study covers the one-year period from June 1, 2022 to May 31, 2023, and the JFTC sent out the Questionnaire on May 30 to more than 110,000 businesses, including 4,030 businesses that we sent written notices of caution in emergency study 2022.
In addition, as part of the JFTC’s efforts to strengthen response to labor cost pass-through, the JFTC sent the Questionnaire with a focus on industries where labor costs account for a high proportion of the cost structure, such as road freight forwarding and information services.
At the same time, the JFTC will conduct a separate survey on 13 individual enterprises whose business names have been published because an emergency survey last year found that they left their transaction prices unchanged without consultation for a large number of their business partners.
Even businesses that have not received the Questionnaire can answer to this special survey through a special page on the JFTC’s website. Therefore, the JFTC is looking forward to receiving a wide range of responses from business owners, especially information on passing on the increase in labor costs.
In the future, based on the results of the written survey, the JFTC will conduct an additional written survey, as well as conduct an on-site investigation into any suspected cases of deferring review of transaction prices without consultation. In addition, the JFTC will take the necessary actions, such as sending a written notice of caution specifying specific concerns, in cases where actions that may lead to problems have been found, and will compile the results of the survey within 2023.
(Selection of priority industries for on-site inspection)
Next, I will talk about "Selection of priority industries for on-site inspection in fiscal 2023."
On March 1, the JFTC announced “Action Plan to Promote Fairness in Transactions with Small and Medium Sized Enterprises for FY2023”, that has three main pillars: strengthening enforcement of the Antimonopoly Act, strengthening enforcement of the Subcontracting Act, and disseminating the concept of the Antimonopoly Act and the Subcontracting Act, and decided to promote the fairness of transactions.
With regard to strengthening enforcement of the Subcontracting Act, etc., the JFTC selected 5 industries as priority industries for on-site inspection in fiscal 2023: information services, road freight forwarding, metal products manufacturing, production machinery and equipment manufacturing, and transportation machinery and equipment manufacturing, based on the status of processing of "buy-in" in fiscal 2022 under the Subcontracting Act.
In the future, the JFTC will conduct intensive on-site inspections of these 5 industries, and promptly and proactively implement recommendations or guidance under the Subcontracting Act in cases where, through on-site inspections, the main contractor defer transaction prices without consultation with subcontractor.
The JFTC will continue to steadily implement the specific initiatives outlined in the 2023 Action Plan.
(The results of the survey on transactions between shippers and logistics operators in fiscal 2022 and the status of the handling of relevant cases of abuse of superior bargaining position)
Next, I would like to talk about the findings of a survey on transactions between shippers and logistics operators.
The JFTC has been continuously conducting surveys to ensure fair transactions between shippers and logistics operators, and on June 1, we compiled and published the results of the survey that had started in September 2022.
In this survey, the JFTC conducted a written survey of 30,000 shippers and 40,000 logistics operators, and conducted on-site inspections of over 100 shippers. Based on the results of the survey, the JFTC sent written notices of caution to 777 shippers for the cases that could have led to problems under the Antimonopoly Act.
In addition, the JFTC publicized a case in which a shipper made a logistics operator pay customs duties and consumption taxes during customs clearance procedures in fiscal 2022, and since we have learned of a similar case in this fiscal year, the JFTC have included it as a case that could have led to problems.
On the other hand, the JFTC have recognized a case in which a shipper who was aware of publication of such a case in fiscal 2022 voluntarily stopped urging advance payment by a logistics operator, and a case in which a logistics operator who was aware of publication of such a case in fiscal 2022 requested the shipper to review the advance payment and had the shipper cancel it, so we have introduced them as best practices in the hope that such improvement efforts will accelerate further. We hope that both shippers and logistics operators will use this publication to improve their trading practices.
The JFTC will continue to conduct surveys on transactions between shippers and logistics operators in order to understand the status of transactions between shippers and logistics operators, as well as to promote measures to prevent violations by ensuring that the findings of this survey are thoroughly communicated through relevant ministries and organizations. Furthermore, the JFTC will continue to take proactive and strict action in the event that we encounter a specific case that could constitute abuse of a superior bargaining position.
（Tentative translation）
I would like to talk that the Japan Fair Trade Commission (the JFTC) started to send the Questionnaire for the special study on efforts to facilitate the transfer of higher costs and made a request for proactive information provision related to "Abuse of Superior Bargaining Position" under the Antimonopoly Act.
Based on the results of the emergency study announced in December 2022, the JFTC launched the "Special Study" on May 30, 2023 as a further study to ascertain whether the price pass-through fitting in with raising costs has been taking place, in particular, the status of efforts to transfer higher costs related to higher labor costs, and of efforts made after sending written notices of caution related to "Abuse of Superior Bargaining Position" under the Antimonopoly Act.
This special study covers the one-year period from June 1, 2022 to May 31, 2023, and the JFTC sent out the Questionnaire on May 30 to more than 110,000 businesses, including 4,030 businesses that we sent written notices of caution in emergency study 2022.
In addition, as part of the JFTC’s efforts to strengthen response to labor cost pass-through, the JFTC sent the Questionnaire with a focus on industries where labor costs account for a high proportion of the cost structure, such as road freight forwarding and information services.
At the same time, the JFTC will conduct a separate survey on 13 individual enterprises whose business names have been published because an emergency survey last year found that they left their transaction prices unchanged without consultation for a large number of their business partners.
Even businesses that have not received the Questionnaire can answer to this special survey through a special page on the JFTC’s website. Therefore, the JFTC is looking forward to receiving a wide range of responses from business owners, especially information on passing on the increase in labor costs.
In the future, based on the results of the written survey, the JFTC will conduct an additional written survey, as well as conduct an on-site investigation into any suspected cases of deferring review of transaction prices without consultation. In addition, the JFTC will take the necessary actions, such as sending a written notice of caution specifying specific concerns, in cases where actions that may lead to problems have been found, and will compile the results of the survey within 2023.
(Selection of priority industries for on-site inspection)
Next, I will talk about "Selection of priority industries for on-site inspection in fiscal 2023."
On March 1, the JFTC announced “Action Plan to Promote Fairness in Transactions with Small and Medium Sized Enterprises for FY2023”, that has three main pillars: strengthening enforcement of the Antimonopoly Act, strengthening enforcement of the Subcontracting Act, and disseminating the concept of the Antimonopoly Act and the Subcontracting Act, and decided to promote the fairness of transactions.
With regard to strengthening enforcement of the Subcontracting Act, etc., the JFTC selected 5 industries as priority industries for on-site inspection in fiscal 2023: information services, road freight forwarding, metal products manufacturing, production machinery and equipment manufacturing, and transportation machinery and equipment manufacturing, based on the status of processing of "buy-in" in fiscal 2022 under the Subcontracting Act.
In the future, the JFTC will conduct intensive on-site inspections of these 5 industries, and promptly and proactively implement recommendations or guidance under the Subcontracting Act in cases where, through on-site inspections, the main contractor defer transaction prices without consultation with subcontractor.
The JFTC will continue to steadily implement the specific initiatives outlined in the 2023 Action Plan.
(The results of the survey on transactions between shippers and logistics operators in fiscal 2022 and the status of the handling of relevant cases of abuse of superior bargaining position)
Next, I would like to talk about the findings of a survey on transactions between shippers and logistics operators.
The JFTC has been continuously conducting surveys to ensure fair transactions between shippers and logistics operators, and on June 1, we compiled and published the results of the survey that had started in September 2022.
In this survey, the JFTC conducted a written survey of 30,000 shippers and 40,000 logistics operators, and conducted on-site inspections of over 100 shippers. Based on the results of the survey, the JFTC sent written notices of caution to 777 shippers for the cases that could have led to problems under the Antimonopoly Act.
In addition, the JFTC publicized a case in which a shipper made a logistics operator pay customs duties and consumption taxes during customs clearance procedures in fiscal 2022, and since we have learned of a similar case in this fiscal year, the JFTC have included it as a case that could have led to problems.
On the other hand, the JFTC have recognized a case in which a shipper who was aware of publication of such a case in fiscal 2022 voluntarily stopped urging advance payment by a logistics operator, and a case in which a logistics operator who was aware of publication of such a case in fiscal 2022 requested the shipper to review the advance payment and had the shipper cancel it, so we have introduced them as best practices in the hope that such improvement efforts will accelerate further. We hope that both shippers and logistics operators will use this publication to improve their trading practices.
The JFTC will continue to conduct surveys on transactions between shippers and logistics operators in order to understand the status of transactions between shippers and logistics operators, as well as to promote measures to prevent violations by ensuring that the findings of this survey are thoroughly communicated through relevant ministries and organizations. Furthermore, the JFTC will continue to take proactive and strict action in the event that we encounter a specific case that could constitute abuse of a superior bargaining position.
（Tentative translation）
