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Warning to Yamada Denki Co., Ltd.

November 20/2003
Japan Fair Trade Commission

The Fair Trade Commission conducted an examination into Yamada Denki Co., Ltd. (“Yamada”) based on the provisions of the Antimonopoly Act. The Fair Trade Commission issued today the following warning to Yamada asserting that there is a potential violation of the provision of Section 19 of the Antimonopoly Act (Paragraph 6 (unjust low price sales) of Designation of Unfair Trade Practices).

1. Related party

Name: Yamada Denki Co., Ltd.
Address: Maebashi City, Gunma Prefecrture
Outline of business: sale of household electric appliances, etc.

2. Sale of household electric appliances, etc. by Yamada

When a consumer, who is a member of the Yamada point card, buys household electric appliances from Yamada,Yamada provides points, which the consumer may use to offset all or part of the purchase price of electric appliances, when next making a purchase from Yamada, at the rate of one yen per one point. In addition, Yamada advertised each week using leaflets inserted in newspapers showing the names and prices of goods including electric appliances sold by Yamada, and the cash equivalent to points provided at the time of purchase as a percentage of selling prices, etc.

3. Gist of the suspected act of violation

With respect to color televisions, personal computers and refrigerators sold by Yamada at its seven stores, mostly located in the Kanto area, amounts obtained by deducting the amount of cash equivalent to points provided to consumers at the time of purchase from selling prices, were lower than their net purchase prices for 13 color television models for one to three weeks (one week for nine models, two weeks for three models and three weeks for one model), for six personal computer models for two to six weeks (two weeks for one model, three weeks for one model, five weeks for one model, and six weeks for three models), and for three refrigerator models for one to two weeks (one week for two models and two weeks for one model). This was found to be an act in which Yamada was suspected of potentially hindering the business activities of retailers of household electric appliances located in the areas surrounding the stores, through continuously selling household electric appliances at prices far lower than the cost of supplying them.

4. Summary of the warning

Yamada shall refrain from acts similar to the act shown in 3 above in the future.

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

Japan Fair Trade Commission:

100-8987 1-1-1 Kasumigaseki, Chiyoda-ku, Tokyo,Japan
Tel: +81-3-3581-1998
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