Message from Chairman Takeshima

January 10/2008
Japan Fair Trade Commission

I was reappointed Chairman of the Japan Fair Trade Commission (JFTC) in last September and 2008 is the sixth year of my tenure as Chairman. As we begin a new year, the JFTC stands committed to the continued rigorous enforcement of the Antimonopoly Act and to actively promoting competition policies.

Two years have passed since the 2005 amendment of the Antimonopoly Act took effect in 2006. During this period, the implementation of the Act has proceeded smoothly and the revised provisions have steadily generated their expected results. The application of the newly introduced leniency program has proceeded smoothly. No less important has been the progress made in the use of the powers of compulsory criminal investigation by the Criminal Investigation Department, which was created for the enforcement of the amended Act. During 2007, these powers were actively utilized in bringing criminal charges against violators in such cases as bid-rigging in the Nagoya municipal subway system construction project, and bid-rigging in geological surveying, planning, and design contracts awarded by the Japan Green Resources Agency. Due to increased uncertainty in the economic outlook and growing concern with the broadening of social and economic disparities, the Japanese public has recently tended to take a more cautious stance on the excessive advancement of competitive society. However, competition is the fountainhead of economic growth in free market economies, and the JFTC intends to rigorously and actively counter price cartels and bid-rigging practices, including government facilitated bid-rigging, which have a serious impact on the lives of the people. Also, needless to say, competition must be conducted in a fair manner. In order to maintain a fair competitive environment, we shall deal swiftly and effectively with unfair trade practices that may cause unfair disadvantages to small- and medium-sized enterprises, including practices involving the abuse of superior bargaining position and selling at unjustly low prices.

One of the most important challenges that the JFTC has before it in 2008 is to move forward on a new round of amendments to the Antimonopoly Act as mandated in the supplementary provisions of the 2005 amendment of the Antimonopoly Act. As the first step, discussions were held by the Advisory Panel on Basic Issues Regarding the Antimonopoly Act established under the Cabinet Office, and the report of the Advisory Panel was released in June 2007. Responding to the proposed amendments to the Antimonopoly Act contained in this report, the JFTC published its "Prospective Amendments to AMA" in October 2007. In light of the fundamental principles set forth in this document, the JFTC intends to speedily prepare a draft bill for submission to the ordinary session of the Diet. This draft bill will contain the various amendments deemed necessary, such as the introduction of a surcharge system applicable to exclusionary type of private monopolization and to certain types of unfair trade practices.

The increasing globalization of corporate and economic activities has added to the importance of international cooperation among competition authorities. For this reason, Japan has been strengthening its bilateral relations with such leading countries and regions as the United States, the European Union, Canada, and South Korea by engaging in bilateral discussions and by concluding bilateral antimonopoly cooperation agreements. Japan is also an active participant and contributor to multilateral discussions on competition policy. In recent years, the International Competition Network (ICN) has come to play an increasingly important role as a framework for multilateral cooperation. The ICN draws its key members from the competition authorities of various countries and regions throughout the world, and is engaged in ongoing discussions through a number of working groups organized around specific themes, such as mergers and cartel activities. Each year, the ICN holds an annual conference for discussions and working group reports, and in April 2008 the 7th Annual ICN Conference will be held in Kyoto, marking the first time the conference is hosted by Japan. As the organizer of the conference, the JFTC will be in a position to steer the deliberations of the conference. Currently, we are busy preparing for the event, and earnestly hope that the success of the Kyoto Conference will heighten the international profile and recognition of the JFTC and of Japan's competition policies.

In addition to the Antimonopoly Act, the JFTC is also responsible for the enforcement of the Premiums and Representations Act and the Subcontract Act, which together comprise an important aspect of our overall mission. During the past year, the Premiums and Representations Act was very much in the limelight as false labeling and misrepresentation of beef and a number of other products emerged as a major social problem. To maintain an environment in which consumers are able to make appropriate product choices, the JFTC will take rigorous and swift action against unjustifiable representations that mislead consumers. Regarding the Subcontract Act, recent economic conditions have continued to place subcontracting enterprises under severe pressure. Against this backdrop, the JFTC will endeavor to ensure fairness in subcontracting transactions in line with the Strategy for Raising the Growth Potential of Individuals and SMEs that have been formulated as part of the government's overall growth strategies. Specifically, we shall ensure fairness through such means as the strict enforcement of the Subcontract Act and the adoption of stronger action against "beating down of prices."

In recent years, we have seen a marked expansion in international corporate activities and a concurrent increase in cases involving violations of the competition laws of a multiple number of jurisdictions. These developments have heightened the need for the international enforcement activities and the strengthening of international cooperation among competition authorities. Against this backdrop, the JFTC looks forward to promoting international cooperation in competition policies and to bolstering its international presence through such means as establishing bilateral agreements and actively contributing to the international cooperative frameworks of the OECD and the International Competition Network (ICN). As a significant step to expand international cooperation, the JFTC will host the ICN annual conference in 2008. We would like to take such an opportunity to further strengthen cooperation through active exchanges of opinions among competition authorities.

The JFTC continues to face a broad range of tasks and challenges that must be addressed during 2008. With these challenges in mind, the JFTC shall remain committed to appropriate policy enforcement and to meeting the nation's expectations by fully performing its duties and responsibilities.

*Every announcement is tentative translation. Please refer to the original text written in Japanese.