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JFTC issues a recommendation to Don Quixote Co., Ltd.

March 9/2005
Japan Fair Trade Commission

The Fair Trade Commission issued a recommendation to Don Quixote Co., Ltd. (hereinafter referred to as “Don Quixote”) based on that firm’s violations of Section 19 of the Antimonopoly Act (“Act”) particularly Items 6 and 14(2) which prohibit Designation of Specific Unfair Trade Practices in the Department Store Business and Abuse of Dominant Bargaining Position respectively. The issuance of this recommendation comes following an investigation pursuant to the Section 48 (1) and (2) of the Act.

(Note) The Department Store Industry refers to the business of retailing a wide variety of goods for daily use by consumers at a shop with the sales floor of 3,000 square meters or more (1,500 square meters or more in any municipality excluding special wards and ordinance-designated cities).

1. About Don Quixote:

 Name: Don Quixote Co., Ltd.
Location: 4-14-1 Kita Kasai, Edogawa-ku, Tokyo
Representative: Representative Director Takao Yasuda

2. Summary of the violation

(1) Don Quixote has been forcing some of its suppliers that are in a relatively weaker bargaining position to dispatch their employees and other staff to assist in the opening of new Don Quixote retail outlets by having them build product displays. The affected suppliers deal in personal effects, daily use miscellaneous goods, household electrical products, food products and other items whose suppliers have ongoing business relations with Don Quixote.

(2) Don Quixote has been forcing the aforementioned suppliers to dispatch employees and other staff to conduct Don Quixote’s routine stocktaking and for routine product display change activities, by exploiting its trade relationships.

(3) Don Quixote has been forcing the aforementioned suppliers to retroactively offer support money for newly opened retail outlets with neither prior notification of the amount nor the basis for calculation nor an accounting how of the money is used. The actual amount of support money for a given store has been calculated by multiplying the amount of their initial deliveries to that outlet by a certain rate or alternatively has been set at one percent of the cumulative amount of their deliveries over a certain period, by exploiting its trade relationships..

3. Summary of the measures to eliminate the violations
(1) Don Quixote shall cease the conduct described above at once.
(2) The board of directors of Don Quixote shall adopt a resolution to confirm that the conduct described above has ceased.
(3) Don Quixote shall not conduct aforementioned acts in the future.
(4) Don Quixote shall notify suppliers with whom it has ongoing business relations of the measures to eliminate the violations, and of the fact that it will never conduct any further acts of the variety that led to this recommendation nor any comparable acts. In addition, Don Quixote shall inform its employees of these measures thoroughly.
(5) In order to ensure that no further instances of the aforementioned illegal acts occur in the future, Don Quixote shall draw up an action agenda on compliance with the Antimonopoly Act and provide training based on this action agenda to employees who are responsible for procurement. Don Quixote shall also take necessary measures to allow for periodical compliance audits by its own legal affairs staff.

4. Deadline for accepting or rejecting the Recommendation
 March 22, 2005
(If Don Quixote consents to this recommendation, a decision consisting of the same items contained herein shall be made final. If not, hearing procedures shall commence.)

*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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