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JFTC issues recommendation to five Chaku-Uta service providers

March 24/2005
Japan Fair Trade Commission

After having made an investigation into suspected violations of the Antimonopoly Act, the Japan Fair Trade Commission today issued the following recommendation to five companies listed in 1 below, which are record producers or subsidiaries of record producers and engage in “Chaku-uta” (See Note 1) services (hereinafter referred to as the “five companies”). The JFTC issued a recommendation based on Section 48, Provision 1 of the Antimonopoly Act to five companies violating Section 19 Provision 1, Number 1 of Unfair Trade Practices (Concerted Refusal to Deal), found in an investigation into the five companies conducted in accordance with the provisions of the said Act.

 (Note 1) “Chaku-uta” is a service that provides part of singing voice of the original master to a cellular phone for the use as a ring tone.

1. Recommended Parties

 Business operator
Head office location

 Sony Music Entertainment (Japan) Inc.
4-5 Rokubancho, Chiyoda-ku, Tokyo
Representative Director Kazutomo Enomoto

Avex Network Inc.
1-30 Minami Aoyama 3-chome, Minato-ku, Tokyo
Representative Director Naomasa Maeda

Toshiba EMI Limited
2-17 Akasaka 2-chome, Minato-ku, Tokyo
Representative Director Masaaki Saito

Universal Music K.K.
5-30 Akasaka 8-chome, Minato-ku, Tokyo
Representative Director Keiichi Ishizaka

Victor Entertainment, Inc.
21-1 Jingumae 2-chome, Shibuya-ku, Tokyo
Representative Director Toshiaki Shibuya

2. Violation by the five companies

 The five companies entrust the Chaku-Uta service to Label Mobile Co. Ltd (See Note 2). Without a justification, they refused by not granting master license (See Note 3) to any operators providing or wishing to provide the Chaku-Uta service other than those entrusting the Chaku-Uta service to Label Mobile Inc.
(Note 2) Label Mobile Inc. is a company which was founded by record producing companies including the five companies for the purpose of creating and operating a joint website for cellular phones in order to offer the record producers’ information. It undertakes the Chaku-Uta service on behalf of record producing companies including the five companies.
(Note 3) The “master license” is an authorization, which is given by the producer of the master record, to use artists’ voices on the original master record. The right to authorize the master lisence is provided by the Copyright Law. No one but the master right holder is permitted to provide the Chaku-Uta service without obtaining a master license from the master rights holder.

3. Elimination Measures
(1) The five companies shall cease the colluded act of granting no master license to any other Chaku-Uta provider, as described in 2, above..

(2) The five companies shall notify each other and Label Mobile Inc. of the measures taken in accordance with 3(1) above and of the fact that they will never conduct any act which is the same kind of the acts described in 2, above, and of the fact that they will decide independently whether or not to grant a master license in the future. In addition, they shall make this information known to their employees and other Chaku-Uta service providers
(3) The five companies shall make independent decisions on whether they grant a master license or not in the future.

(4) For the purpose of ensuring that no event similar to those described in 2, above, occurs in the future, the five companies shall take the necessary measures, Such measures include training to the person in charge of master license on the Act and periodical hearing conducted by their staff in the office of Legal Affairs.

4. Deadline for the Notification of Acceptance or Non-Acceptance of the Recommendation April 4, 2005

 (If the recommendation is accepted, the Fair Trade Commission will issue a decision along the same lines as the recommendation. If it is not accepted, the hearing procedure 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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