Silviase/jgov_v1.4_full_ann huggingface dataset:
will assess the importance of the data possessed by the party in the upstream market (Company A) for competition purposes in the downstream market and the capability of the party in the upstream market (Company A) to engage in data input foreclosure, pursuant to the same prospective as described in Part VI, 2 (2) below.

(Note 12) Further, the JFTC applies the above way of thinking not only to data but also to input goods such as intellectual property rights that are important for competition purposes.

(b) The incentive for implementing input foreclosure

Generally, in a case where the party in the upstream market (Company A in Fig. 2) engages in refusal to supply or disadvantageous supply to a competitor in the downstream market (Company Y), the party in the upstream market (Company A) may see its sales decrease and therefore also its profit decrease. On the other hand, if its competitor in the downstream market (Company Y) becomes less competitive causing the party in the downstream market (Company B) to have a larger market share, then the party in the downstream market (Company B) will see its profit increase. Moreover, its competitor in the upstream market (Company X) may become less competitive causing the party in the upstream market (Company A) to have greater profit. Amid such a market trend, the situation where the party in the upstream market (Company A) will be incentivized to implement input foreclosure is precisely in a case the company group (Company A plus Company B) will be able to earn profit that is greater than the profit that the group may lose by implementing input foreclosure. For instance, in a case where the party in the upstream market (Company A) has a low profit margin while the party in the downstream market (Company B) has a high profit margin and a high market share, or in a case where the party in the downstream market (Company B) has a larger excess capacity, such as in a case where high substitutability exists between the product of the competitor in the downstream market (Company Y) that is subject to refusal to supply or disadvantageous supply and the product of the party (Company B), the party in the upstream market (Company A) will lose only a small amount of profit while it earns a large amount of new profit in the downstream market because of such refusal to supply or disadvantageous supply and thereby the company group is likely to earn greater profit.

B. Obtaining confidential information

The problem of closure of or exclusion from the downstream market may arise in a case where subsequent to a vertical business combination, the party
in the downstream market (Company B in Fig.3) obtains via the party in the upstream market (Company A) competition-related material confidential information about its competitor in the downstream market (Company Y) with whom Company A has trading relations, such as information about the specifications or development of its products, customer information, information about the cost of procurement of raw materials, their quantities or composition, and other information, uses it to its own advantage, and thereby places the competitor in the downstream market (Company Y) in a disadvantageous position, whereupon the competitor withdraws from the downstream market or is caused to weaken its constraint ability.

(2) Cases Where the Problem of Closure of or Exclusion from the Market Arises in the Upstream Market

A. Refusal to purchase or disadvantageous purchase

In some cases, subsequent to a vertical business combination, the party in the downstream market (Company B in Fig.4) may refuse to purchase products from a business operator (Competitor X) other than the party in the upstream market (Company A) or may apply on an unfavorable term for competition purposes to the business operator (Company X) when compared with a situation in the absence of the vertical business combination (hereinafter collectively referred to as “refusal to purchase or disadvantageous purchase”), and thereby causes the competitor in the upstream market (Company X) to become less competitive, to withdraw from the upstream market, or to have a weaker constraint ability. In such
circumstances, a potential competitor in the upstream market may have greater difficulty in doing so or have a weaker incentive to enter the upstream market. Thus, a refusal to purchase or disadvantageous purchase may give rise to the closure of or exclusion from the upstream market. Such refusal to purchase or disadvantageous purchase that may lead to the closure of or exclusion from the upstream market is called “customer foreclosure” (Note 13).

(Note 13) In some cases, customer foreclosure causes the closure of or exclusion from the upstream market and thereby procurement prices for competitors in the downstream market to increase and such competitors to be less competitive, thereby causing closure of or exclusion from the downstream market.

When determining whether customer foreclosure will be implemented or not, the JFTC will consider whether the parties to the relevant business combination have the capability or an incentive to implement it.

(a) Capability to implement customer foreclosure

Such as in a case where the party to the relevant business combination in the downstream market (Company B in Fig.4) has a large market share, or a case where there is a sharp gap in the market share of the party in the downstream market (Company B) and that of its competitor (Company Y), a case where the competitor in the upstream market (Company X) makes relationship-specific investment (Note 14) in compliance with the request of the party (Company B) becoming therefore unable to easily switch to another supplier, if the party in the downstream market (Company B) engages in a refusal to purchase or disadvantageous purchase from its competitor
in the upstream market (Company X), the relevant competitor (Company X) would become unable to sufficiently switch its sales to the business operator (Company Y) other than the party in the downstream market (Company B) and therefore become less competitive and cause the constraint ability exercised by such competitors to be weaker. As a result, the probability to give rise to the closure of or exclusion from the upstream market would increase.

(Note 14) An investment which may be beneficial to the party to the relevant business combination in its trade with one customer but will cease to be beneficial in its trade with another customer.

(b) Incentive to implement customer foreclosure

Generally, in a case where the party to the relevant business combination in the downstream market (Company B in Fig.4) engages in a refusal to purchase or disadvantageous purchase from its competitor in the upstream market (Company X), the party in the downstream market (Company B) may have fewer purchasing alternatives with a resulting profit decrease while its competitor in the upstream market (Company X) becomes less competitive causing the party in the upstream market (Company A) to have greater profit. Moreover, its competitor in the downstream market (Company Y) may become less competitive causing the party in the downstream market (Company B) to have greater profit.

In such market conditions, the party in the downstream market (Company B) will be incentivized to implement customer foreclosure when the company group (Company A plus Company B) earns profit that is greater than the profit it will lose by implementing customer foreclosure. For instance, in a case where the party in the upstream market (Company A) has a larger excess capacity, if the party in the downstream market (Company B) switches its purchase to be made from the competitor in the upstream market (Company X) to the party in the upstream market (Company A), the party in the upstream market (Company A) will have better capacity utilization, and give the company group a greater possibility to increase profit.

At the same time, in a case where for competition purposes it is important for retail business, service industry, etc. in the downstream market to have a wide variety of goods and SERVICE in its relationship with end-users, if the party in the downstream market (Company B) engages in refusal to supply or disadvantageous supply, it may reduce its attractiveness to end-users through decrease in number and variety of goods and SERVICE, and its profit may decrease to a greater extent. In such a case, the company
group will be less incentivized to implement customer foreclosure. Particularly in the case of a platform where a downstream market forms a multi-sided market, if the party in the downstream market (Company B) engages in refusal to supply or disadvantageous supply, as described above, the decrease in the party’s attractiveness to end-users brings the decrease in the number of its own end-users in the downstream market, which will decrease the party’s attractiveness to other user classes in the multi-sided market through the indirect network effects and reduce the party’s profit to a greater extent. Thus, the company group will be further less incentivized to implement customer foreclosure.

### B. Obtaining confidential information

In a case where, subsequent to a vertical business combination, the party in the upstream market (Company A in Fig.5) obtains via the party in the downstream market (Company B) competition-related material information such as selling prices, quantities, and specifications about the products of the competitor in the upstream market (Company X) that has trading relations with the party in the downstream market (Company B), and uses it to its own advantage and place the competitor in the upstream market (Company X) in a disadvantageous position who then will be caused to exit the upstream market or to have weaker power to constrain Company A, there may occur a problem of closure of or exclusion from the upstream market.

(Fig. 5)

(3) Consideration of Competitive Pressure and Other Matters

The JFTC will determine whether through unilateral conduct a vertical business combination will substantially restrain competition in a particular field of trade or not, taking into consideration the degree of the closure of or exclusion from the downstream and upstream markets.
referred to in (1) and (2) above, as well as related parts of each determining factor stated in IV, 2 (1) to (8) above.

3. Substantial Competition Restraint through Coordinated Conduct

In some cases, subsequent to a vertical business combination, the company group may be more apt to engage in coordinated conduct by obtaining confidential information of its competitors. If, as a result, the coordinated conduct between the company group and its competitors is able to easily create a condition that would allow them to manipulate price, etc. of the relevant product to certain extent, the vertical business combination may be substantially to restrain competition in a particular field of trade.

It will be determined whether a vertical business combination may be substantially to restrain competition in a particular field of trade through coordinated conduct or not, after taking into consideration the extent to which subsequent to the vertical business combination the company group and its competitors become more likely to engage in coordinated conduct as described in (1) below, and then the determining factor mentioned in (2) below.

(1) Case Where the Business Operators are more apt to Engage in Coordinated Conduct

Subsequent to a Vertical Business Combination

Subsequent to a vertical business combination, in some cases it may become possible for the party in the downstream market (Company B in Fig.3) to obtain material, competition-related confidential information about the competitor in the downstream market (Company Y) that deals with the party in the upstream market (Company A), by way of the party in the upstream market (Company A). In a similar manner, subsequent to a vertical business combination, the party in the upstream market (Company A in Fig. 5) may be able to obtain material, competition-related confidential information of its competitor (Company X) in the upstream market who deals with the party in the downstream market (Company B) by way of the party in the downstream market (Company B).

As the result of the company group obtaining confidential information of its competitor after a vertical business combination, the company group becomes able to predict fairly accurately that the company group and its competitor will engage in coordinated conduct in the downstream or upstream market and thereby becomes more apt to behave in a coordinated manner,
substantially restraining competition.

At the same time, after a vertical business combination, because the number of competitive units decreases as the result of the input foreclosure or customer foreclosure implemented by the company group, in some cases the company group and its competitors find it easier to engage in coordinated conduct in the downstream or upstream market.

(2) Consideration of Competitive Pressure

Whether a vertical business combination may be substantially to restrain competition in a particular field of trade through coordinated conduct or not will be determined considering how easy the coordinated conduct referred to in (1) above will become, as well as considering each of the determining factors referred to in Part IV, 3(1) to (3), and 2 (7) to (8) in what it corresponds.

Part VI. Substantial Restraint of Competition through a Conglomerate Business Combination

1. Basic Framework, etc.

(1) Basic Framework

As mentioned in Part III, 2 above, a conglomerate business combination does not reduce the number of competitive units in a particular field of trade and does not much affect competition compared with a horizontal business combination and therefore is normally considered not to substantially restrain competition in a particular field of trade unless it gives rise to the substantial restraint of competition through closure of or exclusion from the market, extinction of potential competition, coordinated conduct or other problem. A conglomerate business combination is also reviewed from the two perspectives: substantial restraint of competition through unilateral conduct and substantial restraint of competition through coordinated conduct.

(2) Effect may not be substantially to Restrain Competition

The combination is reviewed in the same manner as a vertical business combination described in Part V, 5.1 (2).

2. Substantial Restraint of Competition through Unilateral Conduct

In some cases there arises the problem of closure of or exclusion from the market because subsequent to a conglomerate business combination the products of each party are combined technologically (Note 15) and supplied to the market, or contractually combined and supplied to the market and are
priced for their lump-sum supply at a level lower than the total of the prices applied to each of such products when it is supplied individually (hereinafter referred to as a "combined supply"). In other cases, even when one of the parties to the relevant conglomerate business combination has no specific plan to enter such market, if the one of the parties becomes possible to unilaterally enter or its business combination with another company makes it possible to enter the other party's product market or regional market, and is expected to become a strong competitor of the other party when it actually enters the market, a business combination will cause the possibility for the party to enter the market to cease to exist, giving rise to a case where the company group easily create a condition that would allow it to certain extent to manipulate price, etc. of the relevant product.

In order to determine whether a conglomerate business combination may be substantially to restrain competition in a particular field of trade through unilateral conduct or not, the extent to which it will give rise to the closure of or exclusion from the market under (1) below and the extent to which competition will be influenced by a business combination with an influential potential competitor under (2) below will be reviewed, and then determination will be made taking into consideration the determining factors referred to in (3) below.

(Note 15) For instance, a case where a product of one party is connected to a product of the other party for use, a case where a product of one party is caused to have specifications that can be used (or can fully exercise its capability) only when it is connected to the product of other party, or a case where neither party discloses to the competitor information necessary for the connection or other purposes.

(1) Cases Where the Problem of the Closure of or Exclusion from the Market Arises

A. Cases where a combined supply is made

In a case where one party (Company A) supplies Product X and the other party (Company B) supplies Product Y respectively to the market relating to two different products (product X and product Y shown in Fig. 6) that are demanded by the same user, if subsequent to a business combination the company group supplies Product X and Product Y in a combined manner, it will weaken the competitor's competitiveness in the market causing such competitor to withdraw from the market or its constraint ability to weaken. In such circumstances potential competitors will have difficulty in
entering the market or have a weaker incentive to enter the market. Thus, there are cases where a combined supply may give rise to the closure of or exclusion from the market. The combined supply that gives rise to the closure of or exclusion from the market is called “conglomerate market foreclosure.”

(Fig. 6)

The JFTC will determine whether or not a conglomerate market foreclosure will be implemented by considering whether the company group is capable of implementing a conglomerate market foreclosure or whether the group is incentivized to do so.

For instance, in a case where one of the parties (Company A) that supplies Product X has a considerably high position in the market and a high complementarity exists between Product X and Product Y of the other party (Company B), a combined supply of Product X and Product Y will place the other party (Company B) that supplies Product Y in a higher position in the market, will cause the competitor (Company Y) in the market of Product Y to be less competitive, weaken its constraint ability to a greater extent and thereby increase the probability that the problem of the closure of or exclusion from the Product Y market will occur.

If in the above case Product Y has a large, profitable market, a combined supply is considered to increase the possibility for the profit of the company group to increase.

B. Obtaining confidential information

In a situation where the supplier of Product X and the supplier of Product Y are required to exchange competition-related material confidential
information for the purpose of ensuring interconnectivity because of technical factors in relation to Product X and Product Y that are supplied by the respective company groups, if subsequent to a conglomerate business combination one of the parties that supplies Product X (Company A in Fig.7) obtains by way of the other party (Company B) that supplies Product Y competition-related material confidential information of its competitor (Company X) and uses it to its own advantage causing its competitor (Company X) to become less competitive and less constraining, then there may occur in the market of the party (Company A) the closure of or exclusion from the market.

(Fig. 7)

(2) Business Combination with Potential Competitors

In a case where one of the parties to a conglomerate business combination (Company B) has no specific plan to do so but the entering party will expectedly become a powerful competitor of the other party (Company A) (Note 17), when the one of the parties (Company B) actually enters the other party (Company A)'s product market or regional market because of low entry barriers and other reasons and thereby it becomes possible for the one of the parties (Company B) to enter the market (Note 16), the relevant business combination will eliminate the possibility for one of the parties (Company B) to enter the market of the other party and thereby greatly affect competition compared to a situation in which the entering
party (Company B) will not expectedly become a powerful competitor of the other party (Company A).

For instance, if a company engaged in business in a market (Company A) enters into a conglomerate business combination with another company (Company B) that is not engaged in the same business but has material input goods such as data and therefore would be expected to become a powerful competitor if it enters the said market (Note 16), and thus eliminates the possibility for Company B to enter the market, then the business combination will greatly affect competition (Note 18) compared to a situation in which the Company B would not be expected to become a powerful competitor.

In assessing the importance that data has for competition purposes or whether a business operator will become a potential influential competitor, following points will be taken into consideration: ① what kind of data are held or collected by one of the parties (Company B) ② how much data are held and how much data are collected by one of the parties daily from how wide an area ③ how frequently does one of the parties (Company B) collect data ④ how much are the data held or collected by one of the parties (Company B) relating to the improvement of the SERVICE provided by the other party (Company A) in the product market Also taken into consideration is how advantageous are the data held or collected by one of the parties (Company B) as compared with the data that are available to the competitor (Company X) in the product market of the other party (Company A) from the perspectives ① to ④ above.

(Note 16) Including an entry after a formation of a business combination between one of the parties (Company B) and another company as well as a solo entry of Company B.

(Note 17) JFTC will determine possibilities of entry of one of the parties (Company B), etc. and possibilities to become a strong competitor of the other party (Company A) after Company B actually enters the other party (Company A)'s market in consideration of the Part IV, 2(3) as well.

(Note 18) Competition-related material input goods including intellectual property rights as well as data are reviewed and considered pursuant to the way of thinking applicable to data.

(3) Consideration of Competitive Pressure

Whether a conglomerate business combination may be substantially to restrain competition in a particular field of trade through unilateral conduct is determined considering the extent of the closure of or exclusion from the market mentioned in A. above, the extent of the influence on