2024 New Year Message from Chair Furuya Kazuyuki
I wish you a happy New Year. Thank you for your continued support this year.
In order to maintain the growth of Japan's economy, which has been facing challenges such as population decline, declining birthrate and aging population, and maintain the vitality of society, ensuring fair and free competition is essential, which leads to securing the choices of businesses and consumers and increasing added value through active innovation. In addition, in order for the Japanese economy to break away from its long-term stagnation and deliver a “virtuous cycle of growth and distribution”, another major role of competition policy is to improve the trading environment in various fields so that we will ensure that appropriate distribution is carried out through market functions brought by fair competition.
Based on this fundamental philosophy, the Japan Fair Trade Commission (JFTC) has been working on various initiatives while keeping an eye on rapid and irreversible economic and social changes such as the development of the digital economy and, this year, we will continue to steadily achieve this mission.
We appreciate your continued understanding and support.
1. Strict and agile law enforcement
The basic mission of the JFTC is strict and agile enforcement of the Antimonopoly Act (AMA) and other acts. With respect to violations of the AMA, we will take strict measures against price cartels and other unreasonable restraint of trade, especially in areas that have a significant impact on people's lives and areas that are being liberalized as a result of deregulation. Also, from the perspective of ensuring fair trade for small and medium-sized enterprises (SMEs), we will engage in strict and agile law enforcement against unfair trade practices such as abuse of a superior bargaining position and violations of the Subcontract Act. In law enforcement, in addition to cease and desist orders and surcharge payment orders, we will use a variety of methods to quickly and effectively restore competition, including commitment procedures, especially in the digital field where technologies change rapidly.
In October last year, we announced the launch of an investigation into suspected violations of the AMA by Google LLC et al. related to search applications on Android devices, as well as seeking information and comments from market participants about the competitive impact of conducts by Google LLC et al. on the Japanese market. We also actively solicit opinions and information from third parties in business combination reviews. We will continue to carry out flexible and effective law enforcement in accordance with the "Statement" (*) published in June 2022.
* “Towards the Active Promotion of Competition Policy in response to Socioeconomic Changes as represented by Digitalization - Coordination and Strengthening of Competition Policy Advocacy and Law Enforcement -" (published on June 16, 2022)
2. Facilitation of price pass-through
In order to deliver a “virtuous cycle of growth and distribution”, the JFTC has been also working as part of an effort of Japanese government, including conducting a special investigation last year, on an unprecedented scale following the urgent investigation the year before last to establish an environment in which increased costs can appropriately be passed through to prices so that SMEs can raise wages. At the end of November last year, based on the result of the special investigation, the JFTC and the Cabinet Secretariat jointly published the “Guidelines for Price Negotiations for Appropriate Pass-through of Labor Costs”. This year, we will continue to work closely with relevant ministries and agencies to disseminate the guidelines, and to take strict actions against violations of laws such as abuse of a superior bargaining position under the AMA and the Subcontract Act.
Through these efforts, we will maintain a competitive environment that will enable smooth price pass-through throughout the supply chain.
3. Strengthening competition policy
In response to various economic and social issues, we actively engage in advocacy activities to improve the competition environment, leading to improvements in corporate compliance with competition laws and reviews of policies, regulations and systems of other government agencies.
In the digital field, we published a market study report on mobile OS and mobile app distribution. in February last year, and one on the news content distribution field in September of the same year. In addition, the Headquarters for Digital Market Competition of the Cabinet conducted a competitive assessment of the mobile ecosystem and the final report was published in June 2023. Based on the policy outlined in this final report, the government is currently considering the necessary legal development including introduction of so-called ex-ante regulations, while taking into account the situation of regulatory development in other countries, including the EU’s DMA. The JFTC will actively participate in and contribute to this work.
Regarding the realization of a green society, the JFTC compiled and published Green Guidelines in March last year with the aim of supporting decarbonization efforts of businesses from the competition policy side. Based on the following exchange of opinions with the businesses, we are planning to amend the guidelines in this spring at the earliest in order to further clarify our approach under the AMA and improve foreseeability.
Additionally, regarding the proper trading of freelancers, the “Act on the Improvement of Transactions Pertaining to Specified Entrusted Business Operators”, which was promulgated in May last year, will come into effect by around fall of this year. We are currently considering the Cabinet Order and other regulations, and will make appropriate preparations for its implementation, including public relations activities, and will do everything we can to ensure its implementation.
4. Promoting international collaboration
As the digital economy evolves, the activities of Big Tech platform operators are expanding across borders and globally. To address competitive concerns in digital markets, such as business combinations and anti-competitive conducts, there has been a greater need for collaboration and cooperation with foreign competition authorities in both law enforcement and competition policy.
In November last year, under Japan’s presidency, we held the “G7 Enforcers and Policy Makers Summit” in Tokyo. In this Summit, we shared our knowledges and experiences of each country and region regarding priorities, challenges and approaches for competition authorities in the digital field and confirmed the strengthening of cooperation, and adopted the “Digital Competition Communiqué”, which sets out our approaches to promote and maintain competition in the digital market and approaches to address competitive issues that may arise from new technologies such as generative AI.
In response to the emergence, rapid evolution and spread of generative AI, Japan is leading the development of international principles and codes of conduct for advanced AI systems through the “G7 Hiroshima AI Process”. The JFTC, in collaboration with related domestic ministries and foreign competition authorities, must accurately catch up with development in innovation and changes in business models in the digital economy and ensure a fair competitive environment. To this end, we will continue our efforts to expand our organizational capabilities and strengthen our systems.
In closing, I would like to conclude my New Year's greetings by asking for your continued understanding and support for the JFTC, and wishing you all good health and prosperity.