Silviase/jgov_v1.4_full_ann huggingface dataset:
specified period, such conduct may have effects in restraining the trade partners' dealings of competitors' products. Thus, where Rebates-giving to the trade partners on the condition for certain amount of purchase from the alleged entrepreneur etc. has effects in restraining the trade partners' dealings of the competitors' products (Note 14), such conduct (hereinafter referred to as "Exclusive Rebate-giving") may have the same effect as Exclusive Dealing. Therefore, whether such conduct falls under Exclusionary Conduct will be determined on the basis of the factors for assessment described in (2) above.

The JFTC will comprehensively consider the following factors to assess whether or not Rebates-giving has an effect in restraining the dealings of competitors' products and have the same effect as Exclusive Dealing.

### A. Level of rebates

Where the amount or rate of rebates is set at a higher level, the trade partners would be more likely to purchase more products from the entrepreneur. Such Rebate-giving is highly effective in restraining the dealings of competitors' products.

### B. Threshold of giving rebates

Where threshold for Rebates-giving is set at the higher level within the achievable range for the trade partners, the rebates function more effectively to have the trade partners deal with products from the entrepreneur with greater preference than with those from the competitors, and the trade partners would be more likely to purchase more products from the entrepreneur.

Where rebate-giving is set an individual threshold for each trade partner, the trade partners would be more likely to purchase more products from the entrepreneur than when the same criteria are set for all the trade partners, because the entrepreneur can set the criteria in accordance with the individual circumstances of each trade partner so that the rebates function more effectively to have the trade partners deal with the entrepreneur's products with greater preference than with the competitors' products. Such Rebates-giving is highly effective in restraining the dealings of competitors' products in such a case.

### C. Progressiveness of rebates

When the level of rebates is progressively set in accordance with the
quantity of trade etc. in a specified period, the rebates function more effectively to have the trade partners to deal with products from the entrepreneur with greater preference than with those from the competitors, and the trade partners would be more likely to purchase more products from the entrepreneur. Such Rebates-giving is highly effective in restraining the dealings of the competitors' products.

### D. Retro-activeness of rebates

If rebates are given for the entire quantity of trade made thus far in case that the quantity of trade has exceeded a certain threshold, the rebates function more effectively in having the trade partners deal with products from the entrepreneur with greater preference than with those from the competitors, and the trade partners would be more likely to purchase more products from the entrepreneur than when rebates are given only for the portion of the quantity of trade etc., which exceed the threshold required for Rebates-giving. Such Rebate-giving is highly effective in restraining the dealings of competitors' products.

(Note 14) In addition to cases in which Exclusive Rebate-giving in itself functions in the same way as Exclusive Dealing, there are cases where rebates are used to ensure the effectiveness of Exclusive Dealing in restraining the dealings of competitive products.

## (4) Illustrative examples

A. Company X manufactured more than half of all the globally produced molybdenum-99—a raw material for a particular radiopharmaceutical—and distributed the majority of molybdenum-99 worldwide. The said radiopharmaceutical cannot be produced from any other raw material but molybdenum-99. In Japan, there were two companies that had purchased molybdenum-99 and produced the said radiopharmaceutical, and the two companies had bought molybdenum-99 only from Company X. Company X prevented other producers and distributors of molybdenum-99 from dealing with the two companies through concluding agreements with them for 10 years, including the provision under which the two companies purchased all the molybdenum-99 that they acquire, use, consume, or process only from Company X. Such conduct by Company X was deemed to exclude the
business activities of other producers of molybdenum-99 (JFTC recommendation decision, September 3, 1998).

B. Company A was the only entrepreneur in Japan producing glass tubes as raw materials for ampoules, which is used as a container of injection solution. It is essential for companies manufacturing ampoules by processing the glass tubes for ampoules and distributing the ampoules (ampoule processors) to use Company A's glass tubes as the users of ampoules; pharmaceutical companies preferred ampoules made using Company A's glass tubes. Under such circumstances, Company X, the only company supplied with Company A's products in Western Japan, intended to halt the continuation or expansion of trade of imported glass tubes by Company Group Y, which purchased imported glass tubes along with those from Company A for processing them into ampoules and selling them to pharmaceutical companies etc. and to enforce sanctions against Company Group Y for such conduct, by a) calling for a shortened term of promissory notes, price increase, and total abolition of the special price discount only to Company Group Y; b) refusing to supply to Company Group Y the same type of glass tubes as those imported by Company Group Y; and c) expressing its intention to terminate transactions with Company Group Y, unless Company Group Y accepted cash settlement or furnished security for its debts to Company X generated from purchases. Such conduct by Company X was deemed to exclude the business activities of company group Y in dealing with imported glass tubes and to exclude the business activities of the foreign glass tube manufacturers, which competed with Company X (JFTC hearing decision, June 5, 2006).

C. Company X was the Japanese subsidiary of Company A, which engaged in manufacturing and distributing CPUs, and distributed CPUs manufactured by Company A in Japan. Company A’s CPUs, which Company X had sold, made up a substantial percentage (approximately 89%) of all CPUs distributed in Japan and had a strong brand value. Under these circumstances, Company X promised to offer rebates or financial support to the five PC manufacturers in Japan (which held approximately 77% share of the total CPUs distributed in Japan) that purchased CPUs for the manufacturing and distribution of PCs, on the following conditions: a) The proportion of Company A’s CPUs used in the PCs manufactured and distributed would approach 100%, and the five PC
manufactures would not use competitors' CPUs; b) the said proportion would be maintained at 90%, with competitors' CPUs at 10%; or c) they would refrain from incorporating the CPUs of Company Y's competitors into PCs in more than one series with a large amount of production volume relative to others. Such conduct by Company X was deemed to induce the five PC manufacturers to refrain from incorporating the competitors' CPUs and to exclude the business activities of the competitors in distributing CPUs to them (JFTC recommendation decision, April 13, 2005).

### 4. Tying

(1) Conduct that may fall under Exclusionary Conduct

Adding new value by offering multiple products tied or integrated together to the trade partners is a method of technological innovation and sales promotion. Therefore, such conduct in itself does not immediately fall under Exclusionary Conduct.

However, where an entrepreneur supplies one product (tying product) only on the condition that the trade partners also purchase another product (tied product) may cause difficulty in the business activities of competitors who are unable to easily find alternative trade partners in the market of the tied product, and therefore may undermine competition in the market of the tied product. Thus, supplying (or purchasing) only on the condition that the trade partners also purchase (or supply) another product (hereinafter referred to as “Tying”) may fall under Exclusionary Conduct (Note 15).

Assessment over whether or not the product required to purchase on condition for the supply of a product is deemed to be “another product” is made from the viewpoint of whether or not each of the combined product has a distinctive character and is traded independently. Specifically, comprehensive consideration is given to the respective products in terms of factors such as whether the users are different from each other, whether the contents and functions are different from each other (including whether the contents and functions of the combined products differ substantially from those of each product before combination), and whether the users can separately purchase each of them (including whether each of the combined products is normally sold or used as a single unit). For example, in case that a cellular phone integrates a digital camera into itself, the contents and functions of the cellular phone with a digital camera will be substantially changed when compared to those of a cellular phone or a digital
camera that are sold separately, and therefore, the cellular phone with a digital camera can be regarded as a single product with distinct functions. In this case, the product—digital camera—that the trade partners are required to purchase under the condition for the trade is not deemed to be “another product.”

Even if the tying and the tied products supplied by the alleged entrepreneur can be purchased separately, or if the quantity of the tying product offered separately from the tied product is small, and many users consequently will purchase the tied and the tying products together, it is deemed to substantially make the trade partners purchase another product. In addition, when the price of the product combined together is lower than the sum of the prices of the tying product and tied product, thereby attracting more users, it is also deemed to substantially make the trade partners purchase another product. (Note 16)

(Note 15) Tying includes such conduct that an entrepreneur supplies one product only on the condition that the trade partners also supply another product and that an entrepreneur purchases a product only on the condition that the trade partners purchase another product.

In addition, Tying includes such conduct that an entrepreneur supplies a product only on the condition that the trade partners purchase a particular product in the market of supplementary products—so-called aftermarket—that will be needed after the product is purchased.

(Note 16) With respect to offering a discount for the tying and the tied products supplied in combination, there are cases where such conduct leads to competition regarding the combined product (a package of the tying and the tied products) between the alleged entrepreneur and its competitors in the market of the tied product. For example, this includes the case where a competitor in the market of the tied product has actually been supplying, or it can supply without particular additional costs, a product that is equal in quality and brand value to that of the tying product of the alleged entrepreneur. In such a case, assessment over whether or not such conduct against the said competitor falls under Exclusionary Conduct is made from the viewpoint of “Below-cost Pricing” (in 2 above).

## (2) Factors for assessment

Where Tying causes difficulty in the business activities of competitors who
are unable to easily find alternative trade partners in the market of the tied product, the said conduct is regarded as Exclusionary Conduct. The JFTC will comprehensively consider the following factors to assess whether or not such conduct would cause difficulty in the business activities of competitors who are unable to easily find alternative trade partners in the market of the tied product.

### A. Conditions of the entire market of the tying and the tied products

When assessment is made over whether or not Tying falls under Exclusionary Conduct, consideration is given to factors concerning conditions of the entire market of the tying and the tied products, such as degree of market concentration, characteristics of the products, economies of scale, degree of differentiation of the products, distribution channels, dynamics of the market, and difficulty of market entry.

For example, where the tied product is not differentiated in the market, it would be more likely that purchases of tied product from the alleged entrepreneur may prevent competitors' tied products from being purchased. Therefore, such a case would be more likely to be deemed to cause difficulty in the business activities of competitors who are unable to easily find alternative trade partners in the market of the tied product.

### B. Position of the said entrepreneur in the market of the tying product

When assessment is made over whether or not Tying falls under Exclusionary Conduct, consideration is given to factors concerning position of the said entrepreneur in the market of the tying product, such as the share of the tying product, its ranking, brand value of the tying product, excess supply capacity, and scale of operation.

For example, where the entrepreneur has a large share of the tying product, more tied products from the entrepreneur would be more likely to be supplied through tying than when the entrepreneur's share is not large. Therefore, such a case would be more likely to be deemed to cause difficulty in the business activities of competitors who are unable to easily find alternative trade partners in the market of the tied product.

### C. Positions of the said entrepreneur and its competitors in the market of the tied product

When assessment is made over whether or not Tying falls under
Exclusionary Conduct, consideration is given to factors concerning positions of the said entrepreneur and its competitors in the market of the tied product, such as the share of the tied product, their ranking, brand value of the tied product, excess supply capacity, and scale of operations.

For example, where the entrepreneur is deemed to have large excess supply capacity for the tied product, the quantity of trade of the tied products supplied through tying is less likely to be limited. Therefore, such a case would be more likely to be deemed to cause difficulty in the business activities of competitors who are unable to easily find alternative trade partners in the market of the tied product.

D. Period of the conduct, number of the trade partners, and quantity of transaction

When assessment is made over whether or not Tying falls under Exclusionary Conduct, consideration is given to factors such as the length of period during which tying has been implemented, the number of counterparties for whom the tying is intended, and the quantity of trade.

For example, where Tying has been implemented over a long period or where the number of counterparties, which the tying is related to, is large, such a case would be more likely to be deemed to cause difficulty in the business activities of competitors who are unable to easily find alternative trade partners in the market of the tied product.

### E. Conditions of the conduct

When assessment is made over whether or not Tying falls under Exclusionary Conduct, consideration is given to factors concerning conditions of the conduct, such as the price of the products tied together, condition for the tying, and the degree of forcing by the condition for Tying, and intent and purpose of the entrepreneur.

For example, even when products combined through tying permit the removal or reverse of the tied product without damaging the functions of the tying product, if the said removal or disabling requires a large cost or time, more users are expected to use the tied product as is. Therefore, such a case would be more likely to be deemed to cause difficulty in the business activities of competitors who are unable to easily find alternative trade partners in the market of the tied product.
## (3) Reference examples

A. Company X was an entrepreneur engaging in business related to development and licensing of PC software. The spreadsheet software of Company X and word processing software of Company Y had the largest shares in their respective markets. Company X feared that distribution of PCs equipped with only the word processing software of its competitor, Company Y, would seriously interfere with Company X's activities for increasing the market share of its word processing software, and it made entrepreneurs engaging in manufacturing and distribution of PCs accept contracts under which both the spreadsheet software and word processing software of Company X were to be installed in their PCs. Because of this contract, the said entrepreneurs sold PCs incorporating both the spreadsheet software and word processing software of Company X and, consequently, the share of Company X's word-processing software increased and became the largest in the market. Such conduct by Company X was deemed to fall under (10) of the Designation of Unfair Trade Practices (JFTC Public Notice No. 15 of 1982) and to violate the provisions of Article 19 of the Antimonopoly Act (JFTC recommendation decision, December 14, 1998).

B. Company X was a subsidiary of Company A, which manufactured and distributed elevators. Company X engaged mainly in the maintenance of elevators manufactured by Company A and was the sole distributor of components of elevators manufactured by Company A. Company B owned buildings equipped with elevators manufactured by Company A and concluded a maintenance contract with regard to the said elevators with an independent maintenance Company Y. Company B ordered particular components of elevators manufactured by Company A from Company X because it was necessary to replace the components in order to repair the elevators. Company X a) responded that it would not sell only the components; would not accept the order unless Company B also would order Company X a service for replacement, repair, and adjustment related to the components; and would deliver the components three months later and b) did not supply the components to Company B although the order for the components was made again later. Such conduct by Company X was deemed to fall under (10) of the Designation of Unfair Trade Practices (JFTC Public
Notice No.15 of 1982) and to violate the provisions of Article 19 of the Antimonopoly Act (Osaka High Court Judgment, July 30, 1993).

### 5. Refusal to Supply and Discriminatory Treatment

(1) Conduct that may fall under Exclusionary Conduct

An entrepreneur basically has the discretion to select to whom and on what conditions it supplies products. Accordingly, if an entrepreneur independently selects a party to whom the product is supplied and determines the conditions for supply in consideration of the details and results of transactions for supply to the trading customers (including entrants intending to be supplied with the products; the same shall apply hereinafter), it does not fall under Exclusionary Conduct in principle.

However, if an entrepreneur carries out, beyond reasonable degree, refusal to supply, imposing restriction on the quantity or contents, or applies discriminatory treatment to the condition or implementation of supply in the upstream market (hereinafter referred to as “Refusals”) concerning a product necessary for the trading customers to carry out business activities in the downstream market, such conduct may cause difficulty in the business activities in the downstream market of the trading customers who are unable to easily find an alternative supplier in the upstream market, and may undermine competition in the downstream market. Thus, carrying out Refusals, beyond reasonable degree, concerning a product necessary for the trading customers to carry out business activities in the downstream market (hereinafter referred to as “Refusal to Supply and Discriminatory Treatment”) may fall under Exclusionary Conduct (Notes 17 and 18).

Whether or not a product in the upstream market can be considered to be “a product necessary for the trading customers to carry out business activities in the downstream market” will be assessed from the viewpoint of whether or not a) the product is an unsubstitutable and indispensable product for the trading customers to carry out business activities in the downstream market and b) it is impossible in reality for the trading customers to produce the product through the trading customer’s own effort, such as investment and technological development. In an area of business where the economies of scale or network effects work strongly, there are some cases where organizations with facilities, the right of use of which was exclusively assigned by the nation or other public entities, were privatized. In such a case, if other entrepreneurs cannot use the
organizations’ facilities, it may be often difficult for them to carry out the business activities in the downstream market. As a result, it is considered that services for the use of those facilities may often fall under “a product necessary for the trading customers to carry out business activities in the downstream market.”

Whether or not the Refusals goes “beyond reasonable degree” will be concretely assessed from the viewpoint of the details and results of transactions for supply and any differences in the relationship between supply and demand according to region. For example, if the price of products that an entrepreneur supplies to some trading customers in the upstream market is significantly low, exceeding the appropriate differences in the costs depending on the difference in trading volume between purchasing entrepreneurs, such price difference will be deemed to go beyond reasonable degree. Meanwhile, for example, if the settlement conditions, delivery conditions, and other supply conditions for an entrepreneur who has supplied products in the upstream market for a long time are different from those for another entrepreneur who is going to be newly supplied, although they are appropriately based on differences in past results, such difference in conditions in treatment would not be deemed to go beyond reasonable degree.

In principle, the selection of purchasers and the establishment of supply conditions independently made by an entrepreneur should be respected as discretion of the entrepreneur. Accordingly, whether or not Refusal to Supply and Discriminatory Treatment by a single entrepreneur falls under Exclusionary Conduct should be assessed especially prudently.

(Note 17) There are cases where an entrepreneur in the upstream market who supplies products that are necessary for carrying out business activities in the downstream market and also carries out business activities in the downstream market. In this case, whether or not the conduct of setting a price of its product in the upstream market at a level higher than that in the downstream market or setting a price that are so close as to interfere with the trading customers from countering by economically reasonable business activities (so-called margin squeeze) falls under Exclusionary Conduct will be determined from the same viewpoint as Refusal to Supply and Discriminatory Treatment.