Silviase/jgov_v1.4_full_ann huggingface dataset:
(Note 18) For example, if an entrepreneur, who engages in wholesale business or retail business in the downstream market and has distribution channels such as a sales network, which is indispensable for selling products in the downstream market, refuses to purchase from a manufacturer or treats a manufacturer discriminately beyond reasonable degree in the upstream market, there are cases that the manufacturer has difficulty in establishing a new distribution channel in the downstream market in reality. In such cases, whether or not the entrepreneur’s conduct in the downstream market falls under Exclusionary Conduct will be determined from the same viewpoint as Refusal to Supply and Discriminatory Treatment.

## (2) Factors for assessment

Where Refusal to Supply and Discriminatory Treatment would cause difficulty in the business activities of the trading customers who are unable to easily find an alternative supplier in the upstream market, 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 the trading customers who are unable to easily find an alternative supplier in the upstream market.

### A. Entire conditions of the upstream market and the downstream market

When assessment is made over whether or not Refusal to Supply and Discriminatory Treatment fall under Exclusionary Conduct, consideration is given to factors concerning entire conditions of the upstream market and the downstream market, such as degree of market concentration, the characteristics of the products, economies of scale, the degree of differentiation of products, distribution channels, dynamics of the market, and difficulty in entry into the upstream and downstream markets.

For example, where the upstream market is a highly oligopolistic market with a high degree of market concentration, the trading customers will not easily find an alternative supplier in the upstream market. The supply of products by the entrepreneur in the upstream market will, therefore, be more critical for the business activities of the trading customers. Accordingly, such a case would be more likely to be deemed to cause difficulty in the business activities of the trading customers who are unable to easily find an alternative supplier in the upstream market.
B. Positions of the said entrepreneur and its competitors in the upstream market

When assessment is made over whether or not Refusal to Supply and Discriminatory Treatment fall under Exclusionary Conduct, consideration is given to factors concerning positions of the said entrepreneur and its competitors in the upstream market, such as the market share of products, the rankings, brand value of the product, excess supply capacity, and business sizes of the trading customers and its competitors in the upstream market.

For example, where the products of an entrepreneur have strong brand value in the upstream market, the trading customers will not easily find an alternative supplier in the upstream market. The supply of products by the entrepreneur in the upstream market will, therefore, be more critical for the trading customers. In this case, if the business sizes of the entrepreneur's competitors are small and their excess supply capacities of the product are limited, the importance of the entrepreneur will increase further. Accordingly, such a case would be more likely to be deemed to cause difficulty in the business activities of the trading customers who are unable to easily find an alternative supplier in the upstream market.

### C. Positions of the trading customers in the downstream market

When assessment is made over whether or not Refusal to Supply and Discriminatory Treatment falls under Exclusionary Conduct, consideration is given to factors concerning positions of the trading customers in the downstream market, such as the market share of products, the rankings, brand value of the product, excess supply capacity, and business sizes of the trading customers in the downstream market.

For example, if the product of the trading customers has a large share and a very strong brand value in the downstream market, the trading customers will not easily find an alternative supplier in the upstream market. In this case, the supply of products by the entrepreneur in the upstream market will be less critical to the business activities of the trading customers. Accordingly, such a case would be more unlikely to be deemed to cause difficulty in the business activities of the trading customers who are unable to easily find an alternative supplier in the upstream market.

### D. Period of the conduct
When assessment is made over whether or not Refusal to Supply and Discriminatory Treatment falls under Exclusionary Conduct, consideration is given to factors such as the period of Refusal to Supply and Discriminatory Treatment.

For example, if the Refusal to Supply and Discriminatory Treatment occurs over a long period, such a case would be more likely to be deemed to cause difficulty in the business activities of the trading customers who are unable to easily find an alternative supplier in the upstream market.

### E. Conditions of the conduct

When assessment is made over whether or not Refusal to Supply and Discriminatory Treatment fall under Exclusionary Conduct, consideration is given to factors concerning conditions of the conduct, such as the prices of the products of an entrepreneur in the upstream market, the conditions and details of transactions with a trading customer, and the intention and purpose of the entrepreneur.

For example, if the prices of products in the upstream market that an entrepreneur supplies to some trading customers are set at a higher level than those for other trading customers, going beyond reasonable degree, on the basis of differences in the details of supply and other conditions, those trading customers will have to increase the price of their products in the downstream market because the purchasing costs will be higher for them. In this case, particularly when the purchasing costs for those trading customers is higher than the selling price of the products sold by other trading customers in the downstream market or the selling price of the product sold by the alleged entrepreneur in the downstream market, if the entrepreneur itself sell it there, it is considered that those trading customers cannot compete with other trading customers (or the alleged entrepreneur) through economically reasonable business activities. Accordingly, such a case would be more likely to be deemed to cause difficulty in the business activities of the trading customers who are unable to easily find an alternative supplier in the upstream market.

## (3) Illustrative examples

A. Ten companies including Company X owned numerous patent rights for the manufacture of pachinko machine (pachinko is a popular Japanese pinball game) and, at the same time, distributed almost all of the pachinko machines
in Japan. The ten companies including Company X outsourced the management of their owned patent rights to Company Y and substantially participated in the decision making on granting a license of patented inventions for pachinko machines. The patented inventions owned or managed by Company Y were important rights for the manufacture of pachinko machines. Under the circumstances, it was difficult to manufacture pachinko machines without being granted a license of the patented inventions. On the basis of a policy of preventing new entry into the pachinko machine manufacturing market (downstream market), the ten companies including Company X and Company Y attempted to accumulate patented inventions owned or managed by Company Y and made it impossible for persons who intended to enter the market to commence the manufacture of pachinko machines by refusing to grant a license of the patented inventions to anyone other than the existing pachinko manufacturers in the market, pertaining to licensing the patented inventions (upstream market). As a result, such conduct by the ten companies including Company X and Company Y was deemed to exclude the business activities of entrepreneurs who intended to manufacture pachinko machines (JFTC recommendation decision, August 6, 1997).

B. Company X was engaged in the regional telecommunications business in eastern Japan and had an extremely large market share in almost all areas of eastern Japan in terms of the volume of holdings of subscriber optical fiber facilities, which was indispensable for providing optical fiber telecommunications services, and in terms of the number of optical fiber telecommunications to the home (FTTH services). Therefore, it was extremely important for those who had no subscriber optical fiber equipment to connect with the subscriber optical fiber equipment owned by Company X in the subscriber optical fiber equipment connection market (upstream market) to provide services in the FTTH service market (downstream market). Under the circumstances, Company X provided FTTH services at a price of the user fee, which was lower than the connection fee paid to Company X by other telecommunications carriers. Therefore, in order to win users, other telecommunications carriers had to set a user fee that could counter against the user fee of Company X while paying Company X the connection fee; further, the other telecommunications carriers would be forced to suffer a large deficit, because it would generate negative margins. It has virtually
become extremely difficult for other telecommunications carriers to enter the FTTH service business. Such conduct by Company X was deemed to exclude the business activities of other telecommunications carriers who intended to connect the subscriber optical fiber equipment owned by Company X and provide FTTH services (Tokyo High Court Judgment May 29, 2009).

## Part III Substantial Restraint of Competition in Any Particular Field of Trade

### 1. A Particular Field of Trade

## (1) Basic view

Whether or not the Exclusionary Conduct described in Part II above falls under Exclusionary Private Monopolization is assessed from the viewpoint of the influence that the alleged conduct has on the competition in a particular field of trade.

In this case, a particular field of trade means the scope where the Exclusionary Conduct causes a substantial restraint of competition. The scope is relatively decided depending on factors such as the objects, regions, and conditions of the conduct and trade. Accordingly, it is in principle, like the unreasonable restraint of trade, that the JFTC will assess the scope influenced by the related trade depending on factors such as the objects, regions, and conditions of the conduct and trade and determine the scope where competition is substantially restrained.

Exclusionary Private Monopolization is often committed by a single entrepreneur. In addition, there are various types of Exclusionary Conduct. There are cases where multiple acts could be committed as Exclusionary Conduct. Therefore, to determine a particular field of trade pertaining to Exclusionary Private Monopolization, at the time of assessing the scope influenced by the trade pertaining to Exclusionary Conduct, the JFTC will consider the scope of products (in (2) below) that substitute for the traded products (Note 19) or the geographical scope (in (3) below) for users (or suppliers), as necessary.

(Note 19) The traded products refer to the tied products when the Exclusionary Conduct falls under “Tying” (in 4 of Part II above), and refer to the products in the downstream market when the Exclusionary Conduct falls under “Refusal to Supply and Discriminatory Treatment” (in 5 of Part II above).

## (2) Scope of products
The scope of products is determined mainly from the viewpoint of the substitutability of products for users. The degree of the substitutability of products for users often corresponds to the degree of similarity of utility of the products, and the scope of products is often determined from the degree of similarity of utility of the products.

In addition, when the scope of products is determined, besides the degree of the substitutability of products for users, if necessary, the JFTC would consider whether suppliers are able to switch the manufacture and sale of one product to another within a short period of time without substantial added cost and risk.

Assessing the degree of similarity of a product’s utility for users, the JFTC will consider the following factors.

### A. Usage

Consideration is given to whether or not a product is, or has the potential to be, used in the same manner as the traded product.

To determine whether both, a product and the traded product, are used in the same manner, the following factors are considered: external features such as size and form; specific material characteristics such as strength, plasticity, heat resistance, and insulation; quality such as purity; and technological characteristics such as standards and systems. (However, even if these characteristics differ to a certain extent, both products might be considered to have the same usage.)

Where the traded product is used in several ways, each usage is examined to determine whether any other products are, or have the potential to be, used in the same manner.

### B. Changes in price, quantity, etc

Differences in the level of prices or changes in price and quantity may be considered.

For example, there are cases where the traded product (Product X) is not deemed to have similar utility as that of another product (Product Y), because Product Y is rarely used as a substitute for Product X owing to a significant price difference between Products X and Y or costs that are involved in substituting Product Y for Product X to change the facilities or train employees despite no price difference between Products X and Y.

In addition, it is deemed that Product X has similar utility as that of
product Y, in such a case that the sales volume of Product Y increases or the price of Product Y rises as a result of users' purchasing Product Y as a substitute for Product X, if the price of Product X rises.

### C. Recognition and behavior of users

The recognition and behavior of users may be considered.

For example, there are cases where, even though the specific material characteristics of Product X (the traded product) and Product Y are different, Products X and Y are deemed to provide similar utility since there could be a case in which users use either of them as raw materials to produce Product Z.

In addition, there are instances where, when the price of the traded product was increased in the past, it could be taken into account whether users used another product as a substitute for the traded product.

## (3) Geographical scope

The geographical scope, the same as the scope of products, is determined mainly from the viewpoint of the substitutability of products for users in each area. The substitutability of products can often be determined depending on the behavior of users and suppliers and the presence of problems regarding the transportation of the product.

The JFTC will consider the following factors to assess the behavior of users and suppliers and the presence of problems regarding the transportation of the product.

### A. Business area of suppliers and area for the users to purchase

With regard to the range of the region in which users can normally purchase the product, consideration is given to factors such as the area around which users purchase the product (such as the purchasing behavior of consumers), the business area such as the distribution network of suppliers, and their supply capacity.

Consideration may be also given to the region in which the users purchased the product when the price of the product in a certain region was increased in the past.

### B. Characteristics of products

Features of products, such as perishability, heaviness, and fragility, affect the scope of transportation or the degree of difficulty in transporting the
products.

### C. Means and cost of transport

Consideration is given to factors such as the modes of transportation, the ratio of the transportation cost to the price of products, and whether the transportation cost is larger than the regional price difference in order to assess the range of region in which users can normally purchase the product.

### 2. Substantial Restraint of Competition

## (1) Basic view

With regard to the definition of “substantially to restrain competition in any particular field of trade,” which is provided for in Article 2 (5) of the Antimonopoly Act, the appealed court held that this is interpreted to mean establishing, maintaining, or strengthening the state in which a certain entrepreneur or a certain group of entrepreneurs can control the market at will by being, to some extent, free to influence price, quality, quantity, and other various conditions after competition itself has lessened (Tokyo High Court Judgment May 29, 2009).

If the state of market control by such means is established, maintained, or strengthened, it is deemed that competition is substantially restrained, even in the case where the prices are not increased in reality.

## (2) Factors for assessment

The JFTC will not rely on a certain specific criteria but comprehensively consider the following factors on a case-by-case basis to assess whether or not competition is substantially restrained (Note 20).

### A. Position of the alleged entrepreneur and the conditions of the competitors

(A) Market share (Note 21) and its ranking of the said entrepreneur

Where the alleged supplier has a larger market share and its ranking is higher, it is less easy for its competitors to supply products sufficiently in place of the supplier when the supplier increases price of the traded products. Thus, in such a case that the supplier has the top ranking with a large market share or a case that the gap between the market shares of the supplier and its competitor is wide, it would be more likely to conclude that competition is substantially restrained since the ability of the competitors to
constrain the supplier’s price increase deems to be weaker.

In particular, if these circumstances have continued from the past and are not expected to easily change in the future, it would be more likely to be deemed to cause a substantial restraint of competition.

## (B) Conditions of competition in the market

Where the circumstances that robust competition has so far been made between the alleged entrepreneur and an excluded entrepreneur are deemed to cause price decrease or the improvement of product quality or variety in the entire market, it would be more likely to be deemed to cause a substantial restraint of competition.

Where a market share concentrates on a few leading entrepreneurs as a result of Exclusionary Conduct, it would be more likely to be deemed to cause a substantial restraint of competition, because they tend to take coordinated conduct as they would mostly come to share common interests.

## (C) Conditions of the competitors

Where Exclusionary Conduct makes it difficult for competitors to sell products superior in price and quality or competitors with high business capability to take competitive actions in the market, such as abilities to procure raw materials, technical capabilities, marketing capabilities, creditworthiness, brand value, and advertising capabilities, it would be more likely to be deemed to cause a substantial restraint of competition.

Where the excess supply capacities of competitors are not sufficient, the abilities of the competitors to constraint the said entrepreneurs' price increase may not work better than otherwise. Therefore, it would be more likely to be deemed to cause a substantial restraint of competition.

### B. Potential competitive pressure

Generally, where market entry is not easy, and it is less likely that a new competitor enters the market within a certain period in case that the alleged entrepreneur increases the price of the traded product, the said entrepreneur could be, to some extent, free to influence price and other conditions. Therefore, it would be more likely to be deemed to cause a substantial restraint of competition.

With regard to whether or not potential competitive pressure works
sufficiently, the JFTC will comprehensively consider the following factors to assess whether or not the possibility of entry by another competitor within a certain period can be a factor preventing the said entrepreneur from becoming, to some extent, free to influence price and other conditions of the traded products (Note 22).

## (A)Degree of institutional entry barriers

Where regulations based on legislations serve as an entry barrier, potential competitive pressure is unlikely to work, because the entry will not be possible even if the said entrepreneur increases the price of the traded products.

## (B) Degree of entry barriers in practice

When the scale of capital necessary for entry is large, and an entrant is under less advantageous conditions than those for existing entrepreneurs in terms of location, technical issues, conditions of purchasing raw materials, or sales conditions, potential competitive pressure is unlikely to work.

(C)Degree of substitutability between the entrant’s and the entrepreneur’s products

Where substitutability between the entrant’s product and the entrepreneur’s product is high because it is not considered that users can purchase and use the entrant’s product without hesitation, potential competitive pressure is likely to work.

Meanwhile, where it is difficult for the entrant to produce and distribute product with a quality and variety equivalent to those of the entrepreneur’s product, or where users do not purchase the entrant’s product, potential competitive pressure would be unlikely to work because they are familiar with the product that is usually used.

### C. Users’ countervailing bargaining power

Where users do not have the countervailing bargaining power against the alleged entrepreneur for such circumstances that it is difficult for users to switch the suppliers, it would be more likely to be deemed to cause a substantial restraint of competition, because the said entrepreneur becomes, to some extent, free to influence price and other conditions.