Study regarding theory of anticompetitive harm caused by an abuse of superior bargaining position in view of the concept of "competition on the merits"(2022.5)

Home >Japan Fair Trade Commission >CPRC Home >Report/Paper >

Study regarding theory of anticompetitive harm caused by an abuse of superior bargaining position in view of the concept of "competition on the merits" (2022.5)

TANABE, Osamu (Deputy Director, Competition Policy Research Center (Senior Deputy Secretary General for Policy Management, Japan Fair Trade Commission))

Abstract
Regulation of an abuse of a superior bargaining position is expected to be one of the useful tools solving contemporary various business problems, including imposition of one-sided disadvantages against consumers or advertisers by huge digital platforms, and refusal of trading partners’ passing of labor cost, raw material cost, and energy cost increase on their price. How to effectively regulate an exploitative abuse of digital platforms and an abuse of buying power is discussed not only in Japan but also in other countries around the world. While the attention to regulation of an exploitative abuse including an abuse of a superior bargaining position is increased in Japan and in other countries, it is considered that the grounds for prohibiting and correcting an abuse of a superior bargaining position by the Japan Fair Trade Commission (JFTC, Japanese competition authority) using the Antimonopoly Act (Japanese competition law) have to be explained more closely. Vigorously using the regulation of an abuse of a superior bargaining position means that the JFTC directly intervenes in more cases where both sides of parties concerned are free to determine trading terms at their will. It leads to increasing cases where the JFTC’s intervention conflict with freedom of economic activities by businesses. It is not well-founded to argue that bullies by economically superior parties imposing disadvantages against inferior parties must be prohibited and corrected just because their conduct is vice. Currently, the JFTC explains that the theory of anticompetitive harm caused by an abuse of a superior bargaining position lies in infringement of basis for free competition, under which means that parties can determine their trading terms freely and independently. This paper argues that the theory of anticompetitive harm caused by an abuse of a superior bargaining position lies not in infringement of basis for free competition but in infringement of competition on the merits. The paper examines the contemporary significance of such an argument.

Abstract

　
Regulation of an abuse of a superior bargaining position is expected to be one of the useful tools solving contemporary various business problems, including imposition of one-sided disadvantages against consumers or advertisers by huge digital platforms, and refusal of trading partners’ passing of labor cost, raw material cost, and energy cost increase on their price. How to effectively regulate an exploitative abuse of digital platforms and an abuse of buying power is discussed not only in Japan but also in other countries around the world.

While the attention to regulation of an exploitative abuse including an abuse of a superior bargaining position is increased in Japan and in other countries, it is considered that the grounds for prohibiting and correcting an abuse of a superior bargaining position by the Japan Fair Trade Commission (JFTC, Japanese competition authority) using the Antimonopoly Act (Japanese competition law) have to be explained more closely.

Vigorously using the regulation of an abuse of a superior bargaining position means that the JFTC directly intervenes in more cases where both sides of parties concerned are free to determine trading terms at their will. It leads to increasing cases where the JFTC’s intervention conflict with freedom of economic activities by businesses. It is not well-founded to argue that bullies by economically superior parties imposing disadvantages against inferior parties must be prohibited and corrected just because their conduct is vice.

Currently, the JFTC explains that the theory of anticompetitive harm caused by an abuse of a superior bargaining position lies in infringement of basis for free competition, under which means that parties can determine their trading terms freely and independently. This paper argues that the theory of anticompetitive harm caused by an abuse of a superior bargaining position lies not in infringement of basis for free competition but in infringement of competition on the merits. The paper examines the contemporary significance of such an argument.