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DAF/COMP/WD(2016)54

Organisation de Coopération et de Développement Économiques
Organisation for Economic Co-operation and Development

15-Jun-2016________________________________________________________________________________________________________English - Or. English
DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRSCOMPETITION COMMITTEEDAF/COMP/WD(2016)54
Unclassified

Cancels & replaces the same document of 07 June 2016

COMMITMENT DECISIONS IN THE JAPANESE CONTEXT--Note by Professor Tadashi Shiraishi--

15 - 17 June 2016

This paper by Professor Tadashi Shiraishi (Professor of Law, University of Tokyo, Graduate Schools for Law
and Politics) was submitted as background material for Item 9 at the 125th meeting of OECD Competition
Committee on 15-17 June 2016.
The opinions expressed and arguments employed herein do not necessarily reflect the official views of theOrganisation or of the governments of its member countries.
More documents related to this discussion can be found at www.oecd.org/daf/competition/commitment-decisionsin-antitrust-cases.htm

English - Or. English

JT03398206
Complete document available on OLIS in its original format
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation ofinternational frontiers and boundaries and to the name of any territory, city or area.

DAF/COMP/WD(2016)54

COMMITMENT DECISIONS IN THE JAPANESE CONTEXT
Tadashi Shiraishi1
1.

Introduction

1.
The Government of Japan submitted a Bill that would amend the Antimonopoly Act (AMA) tointroduce a commitment decision framework. Based on the comprehensive background paper by the
Secretariat,2 and paying respect to an article by the Chairman,3 I will examine three points: a brief history
preceding the Bill, judicial review, and competition law development. They will be introduced by adescription of the proposed framework of the commitment procedure.
2.
For the purpose of providing topics from Japan to those experts in other jurisdictions, I will try to
avoid local jargon and detailed complexity.4
3.
Because the Government, substantially the Japan Fair Trade Commission (JFTC), has publicly
clarified that hardcore horizontal cartels will not be practically eligible for commitment procedures(paragraph 37 below), I will focus on vertical restraint, exclusionary conduct, and exploitative abuse.5 62.

A brief history preceding the Bill

4.
From 1947 to 2005, the AMA was equipped with crude devices for commitment decisions,but these were repealed by an amendment in 2005 led by the JFTC. Recently, the JFTC seems to be an
advocate of introducing a commitment decision framework. I will collect the relevant facts below.
2.1

The 1947-2005 procedural framework

2.1.1

Overview

5.
The AMA was enacted in 1947. At that time, the only order that the JFTC was empowered toissue was a cease-and-desist order. If the targeted firm contested, the JFTC was able to issue orders only
after an adversarial hearing procedure. Such orders were called after-hearing decisions.
1

Professor of Law, University of Tokyo, Graduate Schools for Law and Politics.

2“Commitment decisions in antitrust cases: Background paper by the Secretariat” (DAF/COMP(2016)7, 30
March 2016).

3

Frederic Jenny, “Worst Decision of the EU Court of Justice: The Alrosa Judgment in Context and the
Future of Commitment Decisions,” Fordham International Law Journal, Volume 38, Issue 3 (2015),
available at <http://fordhamilj.org/files/2015/05/FILJ_Jenny_WorstDecisionoftheEUCourtofJustice.pdf>.

4

For a more detailed, but hopefully still concise, overview of Japanese competition law, see Simon Vande
Walle & Tadashi Shiraishi, “Competition Law in Japan,” in John Duns, Arlen Duke & Brendan Sweeney(eds.), Comparative Competition Law (Edward Elgar 2015), authors’ manuscript available at<http://ssrn.com/abstract=2219881>.

5

The AMA is furnished with a regulation of abuse of a superior bargaining position, also known as ASBP.
In my descriptive analysis, it is a sort of exploitative abuse. Tadashi Shiraishi, “A Baseline for Analyzing
Exploitative Abuse of a Dominant/Superior Position,” UT Soft Law Review, No.5 (2013), available at<http://ssrn.com/abstract=2246558>.

6

Investigations of non-hardcore horizontal cartels have been rare, but a commitment decision framework
might increase their frequency. Regardless, they are not usually subject to administrative fines.

2

DAF/COMP/WD(2016)54
6.
In order to skip the full-specked procedure when appropriate, the original 1947 AMA wasequipped with a recommendation decision procedure (pre-2005 Article 48). Pursuant to the provision, the
JFTC usually recommended remedies to a targeted firm, and, if the firm accepted them, the recommended
remedies became a recommendation decision, another form of a cease-and-desist order.
7.
Statutorily, the JFTC designed the recommended remedies, but there could also be behind-thescenes negotiations between the JFTC and the firm during the investigation phase.
8.
A 1949 amendment added the consent decision procedure (pre-2005 Article 53-3). An
adversarial hearing procedure was usually initiated after an unsuccessful recommendation procedure.
During the hearing procedure, however, the firm was able to submit proposed commitments to the JFTC,
conceding the fact findings and legal evaluations by the JFTC. If the JFTC approved the commitments,
they became a consent decision, a third form of a cease-and-desist order.
9.
In cases of non-compliance with a cease-and-desist order, the JFTC could request that the courts
impose a punitive fine (Articles 90 (iii) and 95, or Article 97).
2.1.2

Observations and analyses

10.
It should be noted that vertical restraint, exclusionary conduct, and exploitative abuse were freefrom administrative fines throughout the period from 1947 to 2005. The 1977 amendment, which
introduced administrative fines, was exclusively for hardcore horizontal cartels.
11.
In addition, the JFTC decisions lack(ed) binding effects on private litigation, even though aconsent decision required concession by the addressee. The Supreme Court admitted in Tsuruoka Kerosenethat the existence of a recommendation decision or a consent decision could be a positive factor for judges’
findings in a private lawsuit court, because the defendant “voluntarily” accepted the decision. However, it
was not to the extent that the JFTC’s findings bound the courts.7 8
12.
A most prominent case for this note must be the Intel recommendation decision in 2005, the lastyear for the 1940’s procedural framework, regarding the CPU firm’s alleged exclusionary fidelity rebates.
Intel, probably after studying the Tsuruoka Kerosene Supreme Court Judgment, accepted the JFTC’s
recommendation and, at the same time, publicly announced that it would not concede any of the JFTC’s
findings.9 Later, AMD sought damages recovery from the courts in Tokyo, and, years later, they settled.
13.
If Intel had contested, the JFTC investigators would have submitted many of dawn-raided
documents to an adversarial hearing procedure, which an interested person, AMD, could request the JFTC
to allow it to read and copy (pre-2005 Article 69). Moreover, the JFTC could not impose any
administrative fines. Intel seemed to have no reason to refuse the recommendation.

7

Tsuruoka Kerosene, Supreme Court Judgment, 8 December 1989, Showa 60 (o) 933. Kerosene consumers
sought damages recoveries and lost on other grounds.

8

If a recommendation decision or a consent decision, as well as an after-hearing decision, became final andbinding, such a decision enabled potential plaintiffs to seek damages recovery pursuant to AMA Articles
25 and 26. However, this was only to satisfy a procedural requirement for potential plaintiffs. Still,potential plaintiffs could seek recovery pursuant to Civil Code Article 709 without any JFTC orders.

9Intel, JFTC Recommendation Decision, 13 April 2005, Heisei 17 (kan) 1. Intel’s News Release, “Intel
Agrees To Comply With JFTC Recommendation; Disagrees With Findings Of Fact” (31 March 2005).

3

DAF/COMP/WD(2016)54
14.
The Microsoft recommendation decision in 1998, which remedied its tying arrangement of Excel
and Word, 10 may be another example that possibly followed a similar story to Intel’s. No private
enforcements were reported.
2.2

The 2005-2013 procedural framework

2.2.1

Overview

15.
After the Strategic Impediments Initiative talks with the United States, from 1989 to 1990, the
JFTC gradually accumulated power and finally renovated its procedural framework through a 2005
amendment. The problem was not recommendation or consent decisions, but after-hearing decisions thattook years if the alleged firm actively contested. This meant that it took a long time for the JFTC to issue
cease-and-desist orders (i.e., after-hearing decisions). Moreover, in hardcore horizontal cartel cases, the
JFTC could impose administrative fines only after issuing a cease-and-desist order. Fine orders could becontested for another years.
16.
Thanks to the 2005 amendment, the JFTC streamlined its ordering procedure, making it capableof issuing a cease-and-desist order and an administrative fine order at the same time, after a succinct preorder procedure. If the addressee wanted to contest, it requested an adversarial hearing procedure. Orderedfines carried interest even during hearing procedures and, as a result, addressees usually paid before
contesting.
17.
Recommendation decisions and consent decisions were replaced by the streamlined 2005
framework outlined above.
2.2.2

Observations and analyses

18.
The repeal of the crude 1940’s framework of commitment decisions did not seem to raise
problems, at least until 2009. Vertical restraint, exclusionary conduct, and exploitative abuse were still freefrom administrative fines between 2006 and 2009. In addition, the JFTC decisions lack(ed) binding effects
on private litigation (paragraph 11 above).
19.
A prominent example, in which a large firm did not contest, may be the Seven-Eleven Japanorder regarding its exploitative abuse of franchisees.11 It was foreseen that a number of franchisees would
seek damages recovery, but Seven-Eleven Japan did not contest the JFTC order itself. The relevant
franchisees did seek damages, and the courts rendered a number of judgments. Some franchisees won,while a number of others lost.12
2.3

Significant changes

20.

A tide change occurred, in my view, due to amendments in 2009 and 2013.

10

Microsoft, JFTC Recommendation Decision, 14 December 1998, Heisei 10 (kan) 21. Excel was alreadypopular in Japan, but Word was behind a native incumbent.

11

Seven-Eleven Japan, JFTC Cease-and-desist Order, 22 June 2009, Heisei 21 (so) 8.

12An exception, in which a large firm contested, may be the JASRAC case. JASRAC, JFTC Cease-and-desist
Order, 27 February 2009, Heisei 21 (so) 2. The music copyright administrator allegedly required
broadcasters to agree to contracts which in effect excluded other collecting societies. According to the
JASRAC, it was impossible to comply with the JFTC’s order. If true, it is understandable why the
JASRAC contested it for years, although it was free from administrative fines.

4DAF/COMP/WD(2016)542.3.1

The 2009 amendment

21.
The 2009 amendment empowered the JFTC to impose administrative fines for vertical restraint, 13
exclusionary conduct, and exploitative abuse.
22.

Monetary sanctions normally raised the possibility of contested orders.

23.
Constrained calculation formulae increased the possibility of contested orders, moreover. AMA’s
administrative fines require the JFTC to apply the relevant provisions non-discretionarily. The JFTC is
obliged to impose an administrative fine if it finds qualified illegal conduct. The JFTC is also obliged to
impose the size of the fine pursuant to the hard calculation formulae prescribed in the AMA. Such aframework has been seen as indispensable for helping lawmakers to avoid unconstitutional double
penalties. It has been interpreted that discretion is a feature of penalties in the meaning of the Constitution.
24.
To date, the JFTC has imposed administrative fines in five exploitative abuse cases, all of whichwere contested. As of 1 June 2016, four of them were still pending in the JFTC’s adversarial hearing
procedures. For the purpose of a constrained calculation, the JFTC is required to make elaborate findings
not only regarding the fine itself but also on the theory of harm.
25.
The JFTC has not ever issued any administrative fine orders related to vertical restraint or
exclusionary conduct. Due to the non-discretional nature of the fines, the JFTC is prohibited fromexempting fines even for innovative cases.
2.3.2

The 2013 amendment

26.
The 2013 amendment, which took effect on 1 April 2015, replaced the JFTC’s adversarial
hearing framework with ordinary judicial reviews by the Tokyo District Court. The JFTC orders first, as it
did after the 2005 amendment, and, if the addressee contests the ruling, the dispute proceeds to the courts
without spending time in an adversarial hearing at the JFTC. The courts are no longer constrained by thesubstantial evidence rule. Plaintiffs-addressees can normally submit evidences to the courts.
27.
Such a framework theoretically reduces the possibility that the JFTC can withstand judicial
reviews.
28.
No judicial review cases that include vertical restraint, exclusionary conduct, or exploitative
abuse were pending at the Tokyo District Court as of 1 June 2016, because the JFTC had not issued any
such orders since the 2013 amendment took effect on 1 April 2015. All of the pending exploitative abusecases are in adversarial hearing proceedings under the pre-2013 framework, pursuant to interim measures.
2.3.3

Possible downgrades

29.
Under such circumstances, however, the JFTC could accumulate its works on vertical restraint,
exclusionary conduct, and exploitative abuse by downgrading cases. Even under the non-discretionary
framework, the JFTC has prosecutorial discretion, including the selection of categories of violation.
30.
The AMA is equipped with double standards for vertical restraint and exclusionary conduct: thesecond degree category for such conduct is normally free from administrative fines. The DeNA case is an
example in which the JFTC issued a cease-and-desist order without an administrative fine to a sort of13

Some forms of vertical restraint became eligible for administrative fines under the 2005 amendment.

5

DAF/COMP/WD(2016)54
exclusive dealing. DeNA did not contest the order, even though it later contended in a private lawsuit courtthat the JFTC did not adequately find exclusionary effects.14
31.
Some sorts of exploitative abuses could be remedied without administrative fine by the
Subcontract Act, which is also enforced by the JFTC.
32.
Warnings (keikoku)15 and cautions (chui)16 are free from administrative fines for all categories in
the AMA.
3.

Proposed framework of commitment procedure

33.
In this section, I outline the basic framework of the proposed commitment decision procedure in
Japan. For the sake of simplicity, I am omitting language that shows that the Diet has not passed the bill.
3.1

Background34.
The Trans-Pacific Partnership (TPP), of which Japan is a signatory, requires each party tointroduce a commitment decision framework.17
35.
In order to implement the requirement, the JFTC proposes an amendment of the AMA tointroduce the framework described below.
3.2

The main provisions

36.
The main provisions consist of eight articles in the AMA, Articles 48-2 to 48-9. The former four
articles are concerned with ongoing conduct, and the latter four are concerned with conduct no longer taking
place. They are mirror images.
37.
Statutorily, all categories could be eligible for commitment procedures,18 but the JFTC is practicallygoing to exclude hardcore horizontal cartels.19 20

14DeNA, JFTC Cease-and-desist Order, 9 June 2011, Heisei 23 (so) 4. DeNA and GREE were two leadingsocial game platforms for mobile phones and other devices. After the order, GREE sought damages
recovery from the Tokyo District Court. They later settled.

15

The Mitani case (paragraph 74 below) is an example.

16

A prominent example of caution is the TEPCO case. Tokyo Electric Power Company (TEPCO), JFTC
Caution, 22 June 2012. TEPCO allegedly tried to unilaterally revise long-term contracts by increasing
prices, resulting in concerns of exploitative abuse.

17

TPP Article 16.2, paragraph 5 prescribes as follows:
Each Party shall authorise its national competition authorities to resolve alleged violations voluntarily by
consent of the authority and the person subject to the enforcement action. A Party may provide for suchvoluntary resolution to be subject to judicial or independent tribunal approval or a public comment period
before becoming final.

18

Articles 48-2 and 48-6.

19

The announcement is not in the proposed amendment but in the “Overview of the Bill” (in Japanese)
publicized under the name of the Cabinet Secretariat, dated March 2016, p. 8.

20

Mergers are eligible, too (Article 48-2). Due to the AMA provisions made in 1998, no one could stop theclock. Pursuant to the amended Article 10 (11)-(14), the JFTC may send a commitment notice (paragraph6

DAF/COMP/WD(2016)54
38.
If the JFTC provisionally considers that it has found illegal conduct by a firm (or firms), and if the
JFTC finds it necessary for the promotion of fair and free competition, the JFTC may send a commitment
notice that informs the firm that it will be allowed to submit proposed commitments, along with informing thefirm of an outline of concerned conduct and relevant statutory provisions.21
39.

The notified firm may submit proposed commitments within 60 days.22

40.
The JFTC shall issue a commitment decision authorizing the proposed commitments, if the JFTC
finds that:(i) they are sufficient for eliminating the concerned conduct, and(ii) they are expected to be certainly implemented.23
41.

The JFTC shall dismiss the proposed commitments, if they do not satisfy either (i) or (ii) above.24

42.
After a commitment decision, the addressee may modify the authorized commitments by acquiring
another commitment decision under the same conditions above.25
43.
As a result of a commitment decision, the concerned conduct and the implementation of thecommitments are exempt from cease-and-desist and administrative fine orders.26
44.

The JFTC shall revoke a commitment decision, if the JFTC finds that:(i) the addressee has failed to comply with the authorized commitments, or(ii) the addressee has acquired the commitment decision via false information.27

45.
After a revocation of a commitment decision, the JFTC may issue a cease-and-desist and/or
administrative fine order within two years, even if the normal five-year period after the cessation of the
conduct has passed.28
3.3

Supplementary comments

46.
The main provisions launch a solid framework that consists of JFTC’s notice, firms’ submissions,and the JFTC’s authorization. However, behind-the-scenes negotiations may proceed. Notices, submissions,and authorizations may be ceremonial in some cases in light of successful behind-the-scenes negotiations.

38 below) to merging firms and extend the Phase II period by a certain number of days, depending on thesituation in the proceeding.
21

Article 48-2 or Article 48-6.

22

Article 48-3 (1) or Article 48-7 (1).

23

Article 48-3 (3) or Article 48-7 (3).

24

Article 48-3 (6) or Article 48-7 (5).

25

Article 48-3 (8) or Article 48-7 (7).

26

Article 48-4 or Article 48-8.

27

Article 48-5 (1) or Article 48-9 (1).

28

Article 48-5 (3)(4) or Article 48-9 (3)(4).

7

DAF/COMP/WD(2016)54
47.
The framework, as far as it is prescribed in the AMA, lacks provisions for collecting third-party
comments or market-testing. However, it is often the case that such practices do not appear in the AMA but
rather in a JFTC Rule or JFTC guidelines that are unveiled later. The JFTC could collect public comments
and/or consult with interested parties.
48.
Whether and when the JFTC will announce a case is unknown. Under the current practice, the JFTC
does not officially confirm its in-depth investigations, including dawn raids: the JFTC speaks to the public
only on the day of orders.
4.

Judicial review

49.
Here, I examine two of the issues shown in the background paper by the Secretariat. They are
judicial review and competition law development.29
50.

Judicial review is a tool for framing an extensive use of commitment decisions.

51.
Judicial review is generally governed by the Administrative Case Litigation Act (ACLA). The only
special rule provided in the AMA is that the Tokyo District Court has the exclusive jurisdiction of first
instance, like judicial review of JFTC orders (AMA Articles 76 and 85). A lawsuit has to be launched usually
within six months after a potential plaintiff learns of the administrative disposition (ACLA Article 14).
4.1

Judicial review at request of the proposing firm

52.
A typical review requested by the proposing firm will be against a dismissal by the JFTC, which has
required the firm to submit allegedly disproportionate or inadequate commitments.
53.
A JFTC commitment decision and a dismissal will be construed as “an administrative disposition
made by an administrative agency at its discretion” in the meaning of ACLA Article 30, which provides asfollows:
The court may revoke an administrative disposition made by an administrative agency at its
discretion only in cases where the disposition has been made beyond the bounds of the agency’s
discretionary power or through an abuse of such power.
54.
However, what is important is the substance of the reviewing criteria. The “bounds of theagency’s discretionary power,” a notion exempt from judicial review, has gradually been curtailed by the
courts’ interpretation. If the court has some expertise in the field, the self-restraint by the court respecting
the agency’s expertise will be reduced or diminished. The same treatment may be undertaken if theplaintiff has some expertise. ACLA Article 30, which was a product of a 1962 amendment to the Act, hasreceived such a curtailing interpretation.30
29

Even when a JFTC infringement order becomes final and binding, it will not have binding effects infollow-on, private enforcements but just positive influences: That is, the situation described in paragraph
11 above is unchanged. Access to the JFTC’s files may be another issue. The JFTC currently has accessguidelines regarding cease-and-desist and administrative fine orders.

30

For a reliable overview on the judicial review of discretionary dispositions, see Tokiyasu Fujita, “Jiyu
Sairyo Ron no Shoso [Various Aspects of the Theory of Free Discretion or Die verschiedenen Aspekte zur
Theorie des freien Ermessens] ,” Nihon Gakushi-in Kiyo [Transactions of the Japan Academy], Vol. 70,
No. 1 (2015), available at <http://ci.nii.ac.jp/naid/110009964918/en/>. The author, a most respectedadministrative law scholar and former Supreme Court Justice (serving from 2002 to 2010), attached to thearticle a four-page summary in German.

8

DAF/COMP/WD(2016)54
55.
In that respect, it should be noted that the Tokyo District Court’s Eighth Civil Chamber has been
accumulating its own expertise in competition law. After the 2013 amendment (2.3.2 above), which tookeffect on 1 April 2015, the Eighth Chamber has aimed to take care of the judicial review of JFTC orders.
Even before the 2013 amendment, private lawsuits seeking injunctive reliefs pursuant to AMA Article 24,
if brought to the Tokyo District Court, were usually concentrated in the Eighth Chamber.
56.
In contrast, the revocation of a commitment decision at the request of the addressee will be rare.
In the Oil Cartel Recommendation Decision case, the Supreme Court dismissed a similar request, because
the addressee accepted a JFTC recommendation voluntarily.31 According to the addressee, it accepted therecommendation because another agency supervising the industry advised the addressee that such an
acceptance would exempt it from criminal referral by the JFTC. The JFTC did send a referral, which was aprerequisite for a criminal prosecution.
4.2

Judicial review at request of a third party

4.2.1

The Novo Industri case57.
If a third party accuses the JFTC of requiring disproportionate or inadequate commitments, it willtechnically be a lawsuit seeking the revocation of a commitment decision, in whole or in part.
58.

However, there is a Supreme Court case that is disadvantageous to such a potential plaintiff.

59.
In Novo Industri, 32 the Danish pharmaceutical firm supplied a kind of enzyme to a Japanesepharmaceutical firm, Amano, with a non-competition clause extending even after cessation of the contract. The
AMA has a special provision for international contracts, Article 6, pursuant to which even the restrained firm
can be a violator and an addressee of an order by the JFTC. After the cessation of the contract, probably at therequest of Amano, the JFTC sent a recommendation to Amano, not to Novo. Amano normally accepted therecommendation decision, which ordered it to delete the non-competition clause. 33 Novo appealed. The
Supreme Court denied Novo’s standing. According to the Court, Novo could test the validity of the clause in acontract lawsuit in which Amano would be a defendant, so the Danish firm did not have a “legal interest”(ACLA Article 9) in requesting the revocation of the recommendation decision.
60.
If Novo prevailed in the contract lawsuit, Amano might have been in a dilemma between the court
judgment and the JFTC decision. The Supreme Court added that the Court would not care in such a situation,
because Amano had accepted the recommendation voluntarily. However, it should be read as an unnecessary
dictum. Even if it had been an after-hearing decision, under the logic of the Court, Novo would have beendenied the standing because it could test the validity of the clause through a contract lawsuit court.
4.2.2

The E-License v JFTC (JASRAC) case61.
If a third party accuses the JFTC of approving scant commitments, it will technically be a lawsuit
seeking revocation of the commitment decision and an imposition of obligation on the JFTC of more measures.
62.

There is a Tokyo High Court judgment that may support such a party.

31

Oil Cartel Recommendation Decision, Supreme Court Judgment, 4 April 1978, Showa 50 (gyo-tsu) 112.
Technically, the addressee had a standing, but had shown no reason to revoke the decision.

32

Novo Industri, Supreme Court Judgment, 28 November 1975, Showa 46 (gyo-tsu) 66.

33

Article 6 has been harshly criticized for its protectionist tone, and the JFTC has refrained from using it, atleast in recent years.

9DAF/COMP/WD(2016)54
63.
In 2009, the JFTC issued a cease-and-desist order to the JASRAC (footnote 12 above). The
incumbent music copyright administrator contested. In 2012, the JFTC revoked its own order via an afterhearing decision. A competitor, E-License, tried to challenge the decision in the Tokyo High Court.
64.
The Tokyo High Court found a standing for E-License.34 According to the judgment, a revocation of
the cease-and-desist order could have remarkably serious effects on E-License, because JASRAC used to be aquasi-statutory monopolist and E-License was the only competitor in the relevant market. The Supreme Court
kept silent on the standing issue and went on to affirm the Tokyo High Court judgment, which revoked the
JFTC decision, reviving the original JFTC cease-and-desist order as a result.35 The case has been remanded toa JFTC adversarial hearing procedure with the JASRAC and the investigators of the JFTC.
4.2.3

Conclusion

65.
It is hard to distinguish the two cases, Novo Industri and JASRAC above. To be sure, E-License
was not in contract with JASRAC, so it could not rely on a contract lawsuit. However, it could seek
injunctive relief pursuant to AMA Article 24, and it actually did. Hence, in order to distinguish the twocases, one should consider the nature of the plaintiff: an alleged beneficiary from the concerned conduct(Novo), or an alleged victim by the concerned conduct (E-License).
66.
If the plaintiff is allowed to proceed with a standing, the review criteria will be the same with thecase raised by the firm that submitted proposed commitments (paragraphs 52-55 above).
5.

Competition law development

67.
There are concerns that an extensive use of commitment decisions could affect the development ofcompetition law regarding criteria of illegality. It is also called the issue of legal certainty and predictability.36
37

68.
A first and half-serious answer from Japan may be “More than zero would be better than zero.”
There have been no vertical restraint or exclusionary conduct cases in which addressees were imposed
administrative fines since such fines were introduced by the 2009 amendment, while there have been a few
second degree cases without administrative fines (paragraphs 29-32 above). There have been no exploitative
abuse cases subject to administrative fines since the 2013 amendment took effect in 2015 and replaced the
JFTC’s adversarial hearing procedures with direct judicial reviews. Those categories could be revived bycommitment decisions.
69.
Thinking about the positive aspects of commitment decisions, we may have to spin out a second-bestresolution for the issue of competition law development.
5.1

Detailed announcement by competition authorities

70.
A first solution is expecting competition authorities to provide their fact-findings and legal
reasonings as much as possible.
34

E-License v JFTC, Tokyo High Court Judgment, 1 November 2013, Heisei 24 (gyo-ke) 8.

35

JFTC v E-License, Supreme Court Judgment, 28 April 2015, Heisei 26 (gyo-hi) 75.

36

Secretariat’s background paper (n 2) paragraphs 44-46 and 62.

37

Legal certainty and predictability regarding commitment decision law is another serious issue (Secretariat’s
background paper (n 2) paragraph 64). That issue could be addressed by self-binding guidelines, as the
background paper mentions.

10DAF/COMP/WD(2016)54
71.
Because Japan has not yet implemented a commitment procedure, I will show similar examples fromthe JFTC’s practices.
72.
The JFTC’s merger review reports may be a good equivalent. The JFTC publicizes a report rightafter a clearance notice in each Phase II case, while the JFTC also collects notable Phase I cases for its annual
merger case reports. Those reports are usually succinct, compared to those from other competition authorities.
The reports may be too thin to allow for quantitative analyses. Moreover, some merging firms offer remedies(i.e., commitments) even before the JFTC informs them of its concern. Such circumstances would make thereports all the more vague. However, for those who usually undertake qualitative analyses, at least in my view,
most reports provide fairly good, if not sufficient, information on fact-finding efforts and legal evaluations.
73.
For another example, the JFTC used to unveil its preliminary assessment in some cases when it
closed its investigation because the alleged firm implemented or promised to implement some commitments.
The Canon case is a good example of this. The announcement by the JFTC in the Canon case provided the
JFTC’s view of the facts, even accompanied with the JFTC’s ad hoc mini guidelines on printers and ink
cartridges.38 It seems that these materials have contributed to some aftermarket lawsuits.39
74.
Even when the JFTC itself fails to elaborate, investigators’ comments published elsewhere injournals sometimes provide useful information. A good example may be the Mitani case. The JFTC
sometimes issues cease-and-desist orders regarding gas stations’ predatory low pricing. They usually seemto be issued without dawn raids. Mitani, a gas station firm in the Fukui Prefecture, reportedly received arare dawn raid, but, in the end, the JFTC did not issue a cease-and-desist order, only a warning. The JFTC
itself provided scant information on this.40 However, investigators’ comments showed detailed informationthat it was a parallel low pricing case with other no-brand stations that were capable of procuring cheaper
gasoline (i.e., not below-cost) than Mitani, which sold branded gasoline. The comments also suggested that
Mitani’s below-cost pricing lacked a requisite contribution to the exclusion of smaller stations.41 Thanks to
the investigators’ comments, I can cite the case to exemplify the theory of causation in competition law.
75.
The downsides may be that all the noted examples above depend upon the JFTC’s voluntary
efforts, either organizational or personal. Facing the possibility of extensive use of commitment decisions,such practices should be made sustainable.42
76.
It should also be pointed out that sound analyses of those succinct descriptions require reading
comprehension levels endorsed by a sufficient literacy with government documents. Such research often
needs side information to allow analysts to read between the lines.
5.2

Expanding the scope of reference

77.
Because national competition laws have a number of common features, a jurisdiction that lacks
enough case law could make reference to cases in other jurisdictions. I believe I need to say nothing morewhen thinking about the marvelous accumulation of contributions at the OECD roundtables.
38

Canon, JFTC announcement of closing investigation and ad hoc mini guidelines, 21 October 2004.

39

Even in my limited knowledge, a plaintiff took advantage of the JFTC materials in an aftermarket lawsuit
at a court and acquired a favorable settlement, as far as I hear from a representative of the plaintiff.

40

Mitani, JFTC Warning, 10 January 2013.

41

Masaya Sakuma & Yoshimichi Yamanaka, Kosei Torihiki [Fair Trade] No. 750 (2013)(in Japanese).

42

See Florian Wagner-von Papp, “Best and Even Better Practices in Commitment Procedures after Alrosa:
The Dangers of Abandoning the ‘Struggle For Competition Law,’” Common Market Law Review, Vol. 49(2012), pp.969-970, available at <http://ssrn.com/abstract=2262864>.

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5.3

Raising competitors for competition authorities

78.
If competition is beneficial for welfare and innovation, the same theory should apply tocompetition between a competition authority and courts. In this respect, stand-alone private lawsuits, aswell as follow-on ones and judicial reviews, should play significant roles.43
79.
Recently in Japan, as far as I know, there have been a fair number of stand-alone private lawsuits
involving even large firms. They include AMD v Intel (paragraph 12 above), GREE v DeNA (paragraph 30
above),44 Softbank v NTT,45 Shimano v Apple,46 and other behind-the-scenes cases. Moreover, amplified by
the 2013 amendment, the Tokyo District Court has been accumulating expertise in competition law(paragraph 55 above).
5.4

Systematic streamlining of knowledge in competition law

80.
A well-structured system for understanding and analyzing competition law could assist all theindividual solutions outlined above. Without a sufficient analytical framework, it is hard to comprehend
and read between the lines of succinct JFTC announcements. Systematically streamlined information
would be relied upon by court judges, and establishing such a plain and reliable system would leadcompetition law to a much better phase, on which commitment decisions could contribute with fewer
drawbacks.

43

See Heike Schweitzer, “Judicial review in EU competition law,” in Ioannis Lianos & Damien Geradin(eds.), Handbook on European Competition Law: Enforcement and Procedure (Edward Elgar 2013), pp.
534-538.

44

AMD v Intel and GREE v DeNA could be classified as follow-on lawsuits, but, substantially, they werestand-alone, because each defendant contended that the JFTC’s findings were wrong and neither court
seemed to be bound by the JFTC order.

45

Softbank v NTT, Tokyo District Court Judgment, 19 June 2014, Heisei 23 (wa) 32660. The plaintiff and thedefendant were two of three largest telecom firms. Softbank lost in its allegation that NTT unlawfully
excluded it.

46

Shimano’s announcement of launching a lawsuit seeking damages recovery from Apple in the Tokyo
District Court, 12 September 2014. It is reported that Apple allegedly invoked exploitative abuse inpurchasing magnetic connectors between power lines and computers from Shimano. This lawsuit seems to
be still pending.

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