"An extract from The Handbook of Competition Enforcement Agencies 2013 a www.GlobalCompetitionReview.com Special Report.”

The Handbook of Competition
Enforcement Agencies

2013
A Global Competition Review special reportpublished in association with:
Atsumi & Sakai
Barrios & Fuentes, Abogados
Bell Gully
Berwin Leighton Paisner LLP
D&B David si Baias SCA
Dandria Studio Legale
Dentons
Edwards Wildman Palmer LLP
Elías, Napadensky & Cía Abogados
ELIG, Attorneys-at-Law
Gärde Wesslau AdvokatbyråHerbert Smith Freehills
Heuking Kühn Lüer Wojtek
J. Sagar Associates
Lapidot, Melchior, Abramovich & CoMagalhães Nery e Dias – Advocacia
Prager Dreifuss LtdSkrine

GCR
GLOBAL COMPETITION REVIEW

www.globalcompetitionreview.com

JAPANOverview
Setsuko Yufu and Tatsuo Yamashima
Atsumi & Sakai

The Japan Enforcement Agency

The substantive provisions of Japan’s competition
rules are contained in the Anti-monopoly Act ofJapan (AMA). The Japan Fair Trade Commission(JFTC) is the principal enforcement agency, which wasestablished as an independent administrative officewith broad enforcement powers and is composed of aChairman and four Commissioners. The AMA comprises four major categories of regulations:• the prohibition of unreasonable restraint of trade(eg, cartels, bid rigging);• the prohibition of private monopolisation;• the prohibition of unfair trade practices; and• regulations on business combination (eg, via mergers and acquisitions).
The JFTC is the sole enforcement agency, except in
the case of criminal investigations where the publicprosecutor’s office is in charge of criminal prosecutions
upon the JFTC’s submission of a criminal accusation to
the prosecutor general.
Recent developments
Cartels

The JFTC issued a formal administrative order (ceaseand desist order and surcharge order) for 19 cartel
cases in 2012. ¥9.6 billion in surcharges were leviedagainst Yazaki Sogyo in January 2012 in the wire harness cartel case, the highest amount of surcharges everimposed against an individual company. The amount ofsurcharges levied in cartel cases is calculated as follows:
the base rate (which is basically 10 per cent, differs according to conditions, increased to 15 per cent if any
cartel is repeated within 10 years) of the sales amountof the relevant products for the period of infringement,
extending up to three years from the date such conductceased. Surcharges imposed for cartel conduct, as well
as abuse of superior bargaining position (see below),
totalled as much as ¥44 billion in the 2011 fiscal year,
which marks the second-highest record for surcharges
in the JFTC’s history.
Regarding criminal investigations, the JFTC founda criminal violation of the AMA in the bearings cartel
case and filed criminal accusations with the prosecutor
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general in June 2012 against three companies, as well
as seven individuals of the three companies accused,
who were engaged in sales of bearings. No criminal
accusations were filed against the immunity applicant
company and its employees.
The JFTC issued a warning against trade associations of pickled Japanese plums, which was the first official action taken for a purchasing price-fixing cartel
since 1992.
The JFTC has expressed its policy of continuing
strong and high-impact enforcements, as well as
strengthening cooperation with foreign authorities forthe purpose of deterrence of infringement. The JFTC
has entered into bilateral cooperation agreements withthe competition authorities of the United States, theEuropean Union and Canada. Under these agreements,various levels of information exchanges and discussions can be made between the participating authorities. The JFTC is entitled to exchange information withother authorities as well, based on the conditions set
out in the AMA.
Leniency

In the 2011 fiscal year, 143 leniency filings were made.
According to a JFTC press release, 18 out of 19 cartel
cases in which the JFTC issued a formal administrative order in 2012 were triggered by the first leniency
applicant before the start of a JFTC investigation, andother alleged companies followed in most cases.
Under the leniency programme in Japan, amaximum of five companies (or groups of companies)
will be granted immunity from, or a reduction in,surcharges, by identifying the alleged facts in detailand submitting relevant evidence. The first applicant
to come forward before the start of a JFTC investigation is granted full immunity, the second is granted a
50 per cent reduction and the third, fourth and fifth
are granted a 30 per cent reduction. Any applicants
after the start of a JFTC investigation are granted
the same 30 per cent reduction. The JFTC has nodiscretion in determining the order of leniency applicants or the percentage of reduction granted forcooperation.

The Handbook of Competition Enforcement Agencies 2013

JAPANUnfair trade practices

Mergers

The JFTC imposed a ¥4.05 billion surcharge against
EDION in February 2012 for abuse of its superiorbargaining position, which was the third case since theenforcement of amendments to the AMA commenced
in January 2010, subjecting abusers of a superiorbargaining position to a surcharge. The base rate forcalculating the amount of surcharges for the abuse ofa superior market position is 1 per cent of the sales
amount of the relevant products for the period of infringement, extending up to three years from the datesuch conduct ceased.
In Japan, it is not necessary for the JFTC todemonstrate a restriction of competition in orderto prove the occurrence of an abuse of a superiorbargaining position in violation of the AMA. In contrast, private monopolisation, which is similar toabuse of dominant position under EU competition
law, requires a restriction of competition by a party
having a market share in the relevant market exceedingaround 50 per cent.
The JFTC also issued a cease and desist order
against Adidas for resale price maintenance in March2012.

The total number of merger notifications for the 2011
fiscal year was 275. In 2012, two cases were cleared
subject to conditions under Phase II review (TokyoStock Exchange/Osaka Securities Exchange and Yamada
Denki/Best Denki) while one case was cleared without
any conditions under Phase II review. There were noformal prohibition decisions in 2012.
Mergers, business transfers, corporate splits (ordemergers), joint share transfers and share acquisitions(including joint ventures) are subject to prior notification under the AMA if they exceed certain thresholds.
Amendments to the AMA, which became effective inJanuary 2010, have introduced mandatory notificationof foreign-to-foreign mergers between undertakingsthat have no Japanese subsidiary or branch office inJapan but that have substantial domestic turnover inJapan (eg, BHP Billiton/Rio Tinto).

Fukoku Seimei Building
2-2-2, Uchisaiwaicho
Chiyoda-ku
Tokyo 100-0011
Japan
Tel: +813 5501 2111
Fax: +813 5501 2211
Setsuko Yufu
setsuko.yufu@aplaw.jp
Tatsuo Yamashimatatsuo.yamashima@aplaw.jp

Proposed Reforms

In March 2010, the Cabinet Office published a bill forthe amendment of the AMA with the aim of abolishing
the current administrative hearing procedure in favourof a more detailed judicial appeal procedure. While thebill was discarded due to the dissolution of the Houseof Representatives in November 2012, this amendmentof the AMA will likely be considered under the newadministration.

Atsumi & Sakai was established in 1994 as a boutique firm focusing mainlyon finance law. Since that time, the firm has developed and broadened its legal
experiences, not only in finance but also in a wide range of corporate anddispute resolution disciplines, including antitrust and competition law, suchas cartel investigations and merger controls. It also advises on antitrust andcompetition law aspects of various transactions, including licensing, franchiseand distributorship arrangements. Recently, Atsumi & Sakai has become increasingly active in the field of international cartel investigations and merger
controls. Many of the firm’s junior lawyers have extensive international experience in Asian, EU and American jurisdictions.

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ABOUT THE AUTHORS

Tatsuo Yamashima
Atsumi & Sakai

Setsuko Yufu
Atsumi & Sakai

Tatsuo Yamashima is a senior associate at Atsumi &Sakai working primarily in the field of antitrust andcompetition law, government regulations, employment
and human resources and other corporate legal affairs.
He has assisted and represented many Japanese andforeign companies with antitrust cases and merger
cases involving the JFTC, as well as authorities in many
foreign jurisdictions. In particular, he has significant
experience with leniency applications for the JFTC. He
is a graduate of the University of Tokyo (BA, 2002; LLM,2004) and is admitted to the bar in Japan. He workedin Brussels at the competition law group of a leading
global firm in 2011 as a visiting foreign attorney.

Setsuko Yufu is a senior partner at Atsumi & Sakai,
having developed for more than 30 years her extensive
experience in cross-border transactions and corporate
practice, including antitrust and competition law.
She is especially experienced in international cartel
investigations and is ranked as a leading individual in
relation to antitrust and competition law in the Legal
500 Asia-Pacific 2013 and Chambers Asia-Pacific 2013
publications. After qualifying at the Japan Federation ofBar Associations, she studied at the Europa Instituut inthe University of Amsterdam and worked in a leading
global law firm in Brussels in 1986–1987. She serves asa board member of the EU Studies Association – Japanand is noted for her comprehensive knowledge of EU
competition law.

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