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JFTC issues recommendation to Mr. Max Corporation

October 22/2004
Japan Fair Trade Commission

The Japan Fair Trade Commission (JFTC)conducted investigation into the Mr. Max Corporation (hereinafter referred to as "Mr. Max") in accordance with the provisions of the Antimonopoly Act and today issued the following recommendation to Mr. Max based on the provisions of Section 48(1) of the said Act as it is in violation of the provisions of Section 19 of the said Act (Paragraph 14(2) of the Designation of Unfair Trade Practices: Abuse of dominant bargaining position as well as Paragraph 1 and 6 of Designation of Specific Unfair Trade Practices in the Department Store Business).(Appended recommendation was omitted.)

*Note: "Department Store Business" denotes a retail business, which sells diverse goods used by general consumers on a daily basis at a store building with selling floor space of 3,000 square meters or more (1,500 square meters or more in the municipalities excluding the special wards of Tokyo and Japan's 13 largest cities known as ordinance-designated cities).

1. Profile of Party concerned

Name Mr. Max Corporation
Address 1-5-7, Matsuda, Higashi-ku, Fukuoka city
Representive Mr. Tadaaki Hirano
Outline of Business Operation of general discount stores (Handling Items: daily commodities, home electric appliances, groceries, clothing, etc.)

2 Outline of violation

(1) Mr. Max, by making use of its dominant bargaining position over the suppliers of daily commodities, home electric appliances, groceries, clothing, etc. in continuous transaction, forced the said suppliers to provide money that exceeds the amount pre-agreed with the said suppliers, is needed to achieve its gross profits target, or exceeds the actual cost for installing racks, stands, etc. at its own stores, on the occasion of settling days and other transactions.
(2) Mr. Max returned a whole or a part of goods to the afore-mentioned suppliers after purchase, taking advantage of their inferior bargaining position to Mr. Max at the phase of inventory adjustment, despite no causes attributable to the said suppliers on condition that Mr. Max bought them out.
(3) Mr. Max forced the afore-mentioned suppliers who have an inferior bargaining position to Mr. Max to dispatch their employees to engage in its own sales operations on the occasion of new open, redecoration, and shutting-up of its own stores.

3. Outline of elimination measures

(1) Mr. Max shall cease and desist from the conducts mentioned in 2 above.
(2) Mr. Max shall notify the afore-mentioned suppliers and thoroughly inform its employees of the measures taken in accordance with the above 3(1) as well as its commitment to the effect that it will refrain from the conducts similar to that described in 2 above in the future.
(3) Mr. Max shall refrain from the conducts similar to that described in 2 above in the future.
(4) Mr. Max shall take necessary measures for providing the training concerning the Antimonopoly Act to its purchasing staff, and having regular audits by its legal staff, in accordance with the code of conduct concerning compliance of the Antimonopoly Act, so that it will refrain from the conducts similar to that described in 2 above in the future.

4 Due date for acceptance or rejection of the recommendation

November 1, 2004
(Where the recommendation is accepted, a decision in line with the recommendation will be issued. Where the recommendation is rejected, hearing procedures will be initiated.)

*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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