October 14/2004
Japan Fair Trade Commission
Submission of the amendment to the Antimonopoly Act to the Diet will be proposed at the Cabinet Meeting on October 15.
1. Revision of the surcharge system
(1) Increasing the surcharge rate
Manufacturers, etc.: Large-sized enterprises: 6% → 10%
Small and Medium-sized enterprises (SMEs): 3%→4%
Wholesalers: Large-sized enterprises: 1% → 2%
SMEs: 1% (no change)
Retailers: Large-sized enterprises: 2% → 3%
SMEs: 1% → 1.2%
(2) Imposing a surcharge rate of 150% of the normal respective surcharge rate on those enterprises that repeat violations that were responsible for the surcharge payment order within 10 years.
(3) Reducing a surcharge rate of 20% of the normal respective surcharge rate on those enterprises whose duration of violation is less than 2 years and who have ceased the unlawful conduct more than one month before the JFTC initiates an investigation (except for the case falling under above (2)).
(4) Expanding the scope of conduct subject to the surcharge system
Current provision: Unreasonable restraints of trade (cartels) restraining the price of goods or services and those affecting the price of goods or services by substantially restraining the volume of supply
→ Amendment: Unreasonable restraints of trade (cartels) restraining the price of goods or services and those which may affect the price of goods or services by substantially restraining the volume of supply or purchase, market share, or customers or suppliers and
Private monopolization through controlling the business activities of other enterprises which restrains the price of their goods or services or which may affect the price of their goods or services by substantially restraining the volume of their supply, market share or customers.
(5) Introducing an adjustment clause in situations where criminal fines are also imposed (Half the amount of the criminal fine shall be deducted from the surcharge in cases where both surcharge and criminal fines are imposed on a corporation.).
2. Introduction of a leniency program
Immunity from or reduction in surcharge payment shall be applied to enterprises that meet statutory conditions (e.g. enterprises committing unreasonable restraints of trade shall voluntarily disclose the existence of violations and provide related information to the JFTC and cease the violation after initiation of an investigation.).
1st applicant before initiation of investigation = total immunity
2nd applicant before initiation of investigation = 50% deducted
3rd applicant before initiation of investigation = 30% deducted
An applicant after initiation of investigation = 30% deducted
Note: the total number of enterprises that may be applied to the leniency program is no more than 3.
3. Revision of hearing procedures, etc.
(1) A system shall be introduced by which the JFTC issues elimination orders after having provided the respondent an opportunity to submit its opinions, etc. and initiates hearings when the elimination orders are objected to (Recommendation system shall be abolished.).
(2) Extending the statute of limitations from 1 year to 3 years for the JFTC to issue elimination orders to ensure elimination of the violation after termination of the unlawful conduct.
(3) A system shall be introduced so that the surcharge payment order does not lose effect in cases where hearing procedures have been initiated. And the JFTC may collect a surcharge by adding an arrears of the interest rate provided for by the Cabinet order if any person fails to pay a surcharge by the designated deadline and the surcharge payment order is sustained by a decision after hearing procedures.
(4) Improving provisions on hearing procedures by hearing examiners.
4. Introduction of compulsory measures for criminal investigations, etc.
(1) Compulsory measures for criminal investigations shall be introduced where a criminal accusation is being pursued.
(2) Penalties against corporations that are in contravention of elimination orders shall be strengthened (a fine of not more than 300 million yen ).
(3) Penalties against interference with inspection, etc. shall be strengthened (a fine of not more than 200 thousand yen → penal servitude for not more than one year or a fine of not more than 3 million yen) and double punishment for corporations (in addition to their responsible employees) shall be introduced.
(4) The provision stipulating that the Tokyo High Court has original jurisdiction over a criminal case for unreasonable restraints of trade, etc. shall be abolished. And district courts shall have jurisdiction of a criminal case for unreasonable restraints of trade, etc.
5. Others
(1) The provision that requires a report on parallel price increases shall be abolished.
(2) The provision shall be prescribed in the supplementary clause that the revised Antimonopoly Act shall be reviewed within two years after the amendment takes effect.
(3) The amendment shall be put into force on the day provided for by the Cabinet order within one year after the date of promulgation.
*Every announcement is tentative translation. Please refer to the original text written in Japanese.
