Message from Chairman Takeshima

January 5/2009
Japan Fair Trade Commission

I was appointed Chairman of the Japan Fair Trade Commission (JFTC) in 2002, so 2009 marks the seventh year of my tenure. As we begin a new year, the JFTC stands committed to the continued rigorous enforcement of the Antimonopoly Act and the active promotion of competition policies.

Three years have now passed since the 2005 amendment of the Antimonopoly Act took effect in January 2006. The leniency program introduced at that time has led to a substantial number of cases based on self-reporting information sources, and has been applied to a total of 27 announced cases through the end of last year. During 2008, under a policy of aggressively filing criminal accusations in the spirit of the amendment, investigations using the Commission's compulsory criminal investigation powers led to the filing of criminal charges with the Prosecutor-General concerning a price-fixing cartel among manufacturers and distributors of galvanized steel sheets. These were the first criminal charges filed in a price-fixing cartel case since 1991, some 17 years ago, and they are expected to have a great impact in preventing other price-fixing cartels.

As illustrated by these examples, the effects of the 2005 amendment to the Antimonopoly Act are steadily emerging. The JFTC intends to continue rigorously and actively countering price-fixing cartels and bid-rigging practices, including government-facilitated bid-rigging, which have a serious impact on the lives of the people. In order to maintain an environment of fair competition, we will also 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 positions and sales at unjustly low prices.

In March 2008, the JFTC submitted a bill to the 169th Diet for additional amendments to the Antimonopoly Act. This bill was based on the recommendations for revising the Antimonopoly Act presented in the report of the Advisory Panel on Basic Issues Regarding the Antimonopoly Act established under the Cabinet Office. Those include the introduction of a surcharge system applicable to exclusionary type of private monopolization and certain types of unfair trade practices, and the introduction of a prior notification system for the acquisition of shares. This bill was tabled for further deliberations and also was not passed by the 170th Diet. The JFTC now plans to conduct further deliberations, including a review of the administrative hearing procedure system, and to prepare a new bill to revise the Antimonopoly Act for submission to the 171st Diet.

In other efforts, the JFTC is pursuing rigorous implementation of the Subcontract Act as specified in the Comprehensive Immediate Policy Package and Measures to Support People's Daily Lives compiled by the government in response to the present harsh economic conditions. Also, as a special measure to support subcontractors, during 2007 the JFTC held Grassroots Subcontractor Discussion Meetings for the first time at 50 locations nationwide. This year we will continue using this new approach to increase public awareness of the Subcontract Act and promote the improvement of subcontractor transactions.

Regarding the Premiums and Representations Act, bills related to the establishment of a Consumer Agency were submitted to the 170th Diet under a government initiative to establish a unified administrative framework for consumer affairs. If these bills are passed, the enforcement of the Premiums and Representations Act will be transferred to the new Consumer Agency. Regardless, fair competition and appropriate consumer choice are like two sides of the same coin. Above all, the ultimate purposes of the Antimonopoly Act are, as stipulated in Article 1, to promote the democratic and sound development of the national economy and to secure the interests of general consumers. Accordingly, the JFTC will continue striving to protect and advance consumer interests via competition policy, keeping these fundamental purposes in mind.

Amid the globalization of corporate activities, the number of international cases has been increasing. Last year, the JFTC issued a cease-and-desist order against marine hose manufacturers and distributors in an international price-fixing case,and also investigated BHP Billiton's plan to purchase shares in Rio Tinto for suspected violation of the Antimonopoly Act. That investigation was later closed after BHP Billiton abandoned the proposed acquisition. The JFTC will continue actively pursuing international cases that exert a major influence on the Japanese market in cooperation with overseas competition authorities.

It is also important to actively establish and strengthen cooperation with overseas competition authorities in diverse frameworks. In April 2008, the JFTC successfully hosted the annual conference of the International Competition Network (ICN), which drew over 500 participants. The ICN conference approved findings reported by the various working groups, with lively debate at the panel discussion entitled "Abuse of Superior Bargaining Position" and organized by the JFTC. Having enhanced our international presence by hosting this conference, the JFTC will make use of this experience to continue playing an active role in international efforts toward strengthening links and cooperation among competition authorities,including ICN activities.

In 2009, the JFTC will remain committed to appropriate policy enforcement starting with the types of issues discussed above, and to meeting the nation's expectations by fully performing our duties and responsibilities.

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