Silviase/jgov_v1.4_full_ann huggingface dataset:
### 4. Split

## (1) Joint Incorporation-Type Split/Absorption-Type Split

A joint incorporation-type split or an absorption-type split (hereinafter referred to as a “split”) has an impact on competition similar to a merger in the sense that a business (all or a substantial part of it) is spun off from one company are integrated with the succeeding company.

Whether or not a joint relationship is formed, maintained or strengthened between the succeeding company and a company that is to be allotted shares in the succeeding company and whether the joint relationship is required for a review are determined in light of the criteria of Article 1 (“Shareholding”).

## (2) Scope of Joint Relationships

If a joint relationship is formed, maintained or strengthened through a split between the succeeding company and the company that is to be allotted shares in the succeeding company, a joint relationship is formed, maintained and strengthened between the succeeding and the allotted company and companies that already have a joint relationship with them.

## (3) Substantial Part of Business

The “substantial part” mentioned above does not mean a substantial part for the succeeding company but for the splitting company. Moreover, it is limited to a case in which the split portion of the business must function as a single business unit, and the portion is objectively deemed to have value to the business of the splitting company. Consequently, whether a split business constitutes a “substantial part” or not is examined on a case-by-case basis according to the actual position of the split business in the market. However, if the annual sales (or turnover corresponding to sales; the same shall apply hereinafter.) of the split business is 5% or less of the total sales of the splitting company and one hundred million yen or less, this split business is generally not considered to be a “substantial part.”

## (4) Splits Not Requiring a Review

When all the companies intending to be involved in a joint incorporation-type split or an absorption-type split belong to the same group of combined companies, a joint relationship is not formed or strengthened so that in general most are not considered to require a review. However, if a joint relationship is formed or strengthened with shareholders other than companies, etc. that belong to the same group of
combined companies as the companies involved in the split, this joint relationship requires a review.

### 5. Joint Share Transfer

## (1) Joint Share Transfer

In a joint share transfer, a newly established company acquires all of the shares of multiple companies. Therefore a strong joint relationship is formed between parties to a joint share transfer, same as in the case of a merger.

Consequently, even if a certain joint relationship formed through shareholdings or interlocking directorates may be deemed not to have a strong impact on competition or to cause a problem, the joint relationship could be strengthened through a joint share transfer under the same set of circumstances, and the joint share transfer could present a problem.

(2) Scope of Joint Relationships

After a joint share transfer, a joint relationship is formed, maintained and strengthened between the multiple companies involved in the joint share transfer and companies that already have a joint relationship with them, via the company that is newly established through the joint share transfer.

## (3) Joint Share Transfers Not Requiring a Review

When all the companies intending to undertake a joint share transfer belong to the same group of combined companies, a joint relationship is not formed or strengthened so that in general most are not considered to require a review.

However, if a joint relationship is formed or strengthened with shareholders other than companies, etc. that belong to the same group of combined companies as the companies undertaking the joint share transfer, this joint relationship requires a review.

### 6. Acquisitions of Business, etc

## (1) Acquisitions of Business

The acquisition of an entire business has an impact on competition similar to a merger in the sense that the business activities of the transferring company are integrated with the acquiring company. Since the transferring company and the acquiring company are not related after the transfer, it is sufficient to examine conditions when the acquired business is added to the acquiring company. Acquisitions of a substantial part of a business or the fixed assets of business are examined in a similar manner.
(2) Scope of Joint Relationships

With respect to the acquired portion, a joint relationship is formed, maintained or strengthened between companies, including companies that already have a joint relationship with the acquiring company.

(3) Substantial Part of Business or Fixed Assets of Business

With respect to an acquisition of a substantial part of a business or the fixed assets of a business, the idea of the —substantial part” is the same as mentioned in item 4 (3) above.

(4) Acquisitions of Businesses Not Requiring a Review

In the case of item A below, a joint relationship is not formed or strengthened so that in general it does not require a review. In addition, even in the case of item B below, a joint relationship is not formed or strengthened so that in general most are not considered to require a review. However, if a joint relationship is formed or strengthened with shareholders other than companies, etc. that belong to the same group of combined companies as the companies involved in the acquisition of business, this joint relationship requires a review.

A. Transfer of a business or the fixed assets of a business (hereinafter referred to as “acquisitions of a business”) that is a corporate division spun off through a 100% capital investment)

B. When the company intending to acquire a business and the one intending to transfer the business belong to the same group of combined companies (5) Leasing of Business

Leasing of a business (in which a lessee manages a leased business in its name and on its accounts, and pays leasing fees to the lessor in fulfillment of a leasing agreement), delegation of the management of a business (in which a company entrusts the management of a business to another company in fulfillment of an agreement), and agreements to share the total profits and losses of a business (agreements between two or more companies agreeing to share the total profits and losses of a business for a specific period) shall be dealt with in the same manner as acquisitions of a business. Unlike the situation described in item (1) above, a joint relationship can be formed, maintained or strengthened between companies already in a joint relationship with them, depending on the nature of the agreements.

Part II. A Particular Field of Trade

With respect to a business combination that should be subject to the review applicable to business combinations in Part I, the business activities of
all the companies that would form, maintain, and strengthen the joint relationships by the relevant business combination (hereinafter referred to as "company group." If hereinafter reference is made simply to "party" or "parties," it shall mean a group of companies that include the party conducting a business combination and all other companies that have a joint relationship formed with the party as of such moment) are reviewed so that the impact of the relevant business combination on competition in a particular field of trade will be determined in accordance with the way of thinking set forth in Part III to Part VI below. The following clarifies the criteria for judgment concerning the definition of a particular field of trade in this case:

### 1. Basic View on the Scope of a Particular Field of Trade

A particular field of trade denotes the scope for determining whether the effects of the business combination may be to restrain competition or not, and is determined, in principle, in terms of substitutability for users, such as the product and service range that are subject to particular trade (hereinafter collectively referred to as “products”; however, if reference is made specifically to a product it will be referred to as “goods” and if reference is made specifically to a service it will be referred to as “SERVICE”), as well as the geographic range of trading areas (hereinafter referred to as “geographic range”).

Further, when necessary, the perspective of substitutability for suppliers is also taken into consideration.

When examining the substitutability available for users the JFTC will suppose that a specific product is supplied by a monopolist in a specific region. Then, under this assumption, the JFTC considers the degree to which users can substitute an alternative product or region for the purchase of the product relating to which a small but significant and non-transitory increase in price (see Notes 2 and 3) is implemented by the monopolist with the aim of maximizing profit. If the degree to which an alternative product or region can be substituted for the purchase of the product is so limited that the monopolist can successfully increase its profit by the price increase, the scope of such price increase can be defined as the extent to which competition is affected by the relevant business combination in one way or another.

Relating to the substitutability available for the supplier in case of a small but significant and non-transitory price increase relating to the
product or the region the JFTC will consider the extent of the possibility for another supplier to change to the production or sale of the relevant product from another product or region over a short term (basically not longer than one year), without incurring much cost or risk. If such possibility of changing from another product or region is so limited that the monopolistic business operator is able to increase profit by a price hike on the product, the extent to which the business operator is able to increase profit by such price hike should be considered to be the extent to which competition on the product may be affected by the relevant business combination.

If a platform works to provide third party with the “place” for their service where a multi-sided market with multiple, different user segments is created, the JFTC will basically determine a particular field of trade for each user segment and then determine how the relevant business combination will affect competition in light of the characteristics of the multi-sided market as described later in Part IV, 2 (1) G.

In addition, in some forms of trade, a particular field of trade can sometimes be constituted by a product range (or geographic range) while another particular field of trade might be constituted by a wider (or narrower) product range (or geographic range), which overlaps. For instance, if a platform mediates business transactions between different user segments and causes strong indirect network effects (refer to Part IV, 2(1) G described later), there are some cases where the particular field of trade comprising each user segment will be defined in an overlapping manner. Moreover, when a company group is operating a wide range of businesses, the product range and the geographic range will be defined respectively for each of the businesses.

(Note 2) Under normal circumstances, “a small but significant and non-transitory increase in price” shall mean a 5%-10% price increase over a more or less one-year period. However, such a percentage is given only as a rough indication. The actually applicable percentage of a price increase shall be considered in each case.

(Note 3) In a case where competition is made, based not principally on the price of the product but on its quality as is the case with some of Internet-based services, the JFTC may take into consideration the extent to which users replace the product with another product or purchase the product in another region in cases where in a certain region a product suffers a deteriorating quality, etc. or where users bear increased costs.
of being offered a product in a certain region. The same shall apply to the substitutability of the product or the region for the supplier. In such a case, as mentioned in 2 below, the degree of the substitutability of the relevant product often coincides with the degree of sameness of its utility, etc. Also, as mentioned in 3 below, the substitutability of a product that is supplied in a region is often determinable from the view point of the range of regions of the suppliers from whom users can purchase the relevant product under normal circumstances.

### 2. Product Range

The product range is defined by the perspective of product substitutability for users, as previously described in Section 1. The degree of product substitutability very often matches the degree of similarity of utility for users, so that the latter criterion can often be applied to determine the degree of product substitutability.

Take for example, two products, Product X and Product Y. The more similar the utility of the two products for users, the more likely it is that users would purchase Product Y in place of Product X if the price of Product X is raised. It can thus be predicted that an increase in the price of Product X would not lead to an increase in the profits of the company that makes Product X, and it could be considered that the presence of Product Y will prevent an increase in the price of Product X. In such cases, Products X and Y are considered to be in the same product range.

In these cases, users mean those to whom the business activities of a company group are directed. If the group manufactures producer goods, users mean companies that process the goods into products at the next level. If the company group manufactures consumer goods, users mean general consumers. If the company group is a distributor, users mean companies at the succeeding distribution level.

Suppose, for example, Product Group Y that has the same kind of utility, etc. as Product X that is used for a particular purpose. If Product Z can be separated from Product Group Y as a product that has a particularly high level of homogeneity in its utility as Product X with respect to a particular specific purpose as part of its purpose, then Product X and Product Group Y serve to determine the range of the relevant product. At the same time, Product X and Product Z may serve to determine the range of the relevant product.

In addition, when defining the product range, besides the substitutability
for users, if necessary, consideration would also be given to whether suppliers are able to switch the manufacture and sale of one product to another without substantially added cost and risk within a short period of time. For example, as a result of assessing the differences in the facilities for supply or the level of the costs of switching supply between Product X and Product Y, if it is expected that a wide range of producers of Product Y are able to switch their production facilities and sales networks to those of Product X in a short period of time without substantial added cost and risk, had a price raise of Product X occurred, there would be a case in which the product range is defined by Product X and Product Y.

When assessing the degree of similarity of a product’s utility for users, the following criterion will be considered.

(1) Content, Quality, etc.

In some cases, the content, quality or other aspects of the product are taken into consideration.

In a case of products, for example, their external characteristics such as size and shape, physical properties such as strength, plasticity, heat resistance and insulating property, qualities such as purity, and technological characteristics such as applicable standards and systems are taken into consideration for the assessment of the degree of similarity (in some cases, however, the same kind of utility, etc. is acknowledged even when these characteristics differ to some extent (see (3) below)). In case of a store-based retailing or service business, etc., the degree of similarity of utility, etc. will be determined in consideration of such as the category, quality, and assortment of the products dealt with as well as business hours, floor areas, and other aspects of user-friendliness. Furthermore, in the case of a communication service or an Internet-based service, etc. that provides service via the communication lines, the degree of their similarity will be determined in consideration of the characteristics of its content such as the type and function of the available service, the qualities such as sound and image provided, communication speed, and the level of security, etc., as well as the user-friendliness such as usable languages and terminals.

When the product is employed for several purposes, each purpose is examined to determine whether any other products are being employed or may possibly be employed for the same purpose. For instance, the products X and Y are deemed to provide similar utility for users in a certain purpose and
products X and Z are deemed to provide similar utility for another purpose.

There is a case in which differences in price levels or changes in price and quantity are considered.

For example, products X and Y can be used for the same purpose, but since the price levels of the products differ, product Y is rarely used as a substitute for product X.

In this case, products X and Y cannot be considered to provide similar utility, etc.

There is also a case in which products X and Y can be used for the same purpose and their price levels do not differ, but in practice product Y is rarely used as a substitute for the product X because costs are involved in substituting product Y for X, to change the facilities or train employees. In this case, it cannot be considered that products X and Y provide similar utility, etc.

On the other hand, when products X and Y provide similar utility, etc., if the price of product X is increased, users tend to purchase product Y and as a result the price of product Y is likely to increase. Consequently, if sales or the price of product Y increases in response to an increase in the price of product X, it can be considered that products X and Y provide similar utility, etc.

## (3) Recognition and Actions of Users

There is a case in which the recognition, etc. of users is considered. For instance, even though content, etc. of products X and Y are different, there could be a case in which users could use either of them as raw materials to produce product Z of the same quality. In this case, products X and Y are deemed to provide similar utility, etc.

Whether a user substituted product Y for X when the price of product X increased in the past is also considered.

### 3. Geographic range

## (1) The basic concept

In the same manner as the product range, the geographic range is determined, to begin with, from the perspective of substitutability for users between different products supplied in a region. In many cases, the degree of substitutability between different products supplied in a region can be determined from the viewpoint of the geographic range of suppliers from whom users can purchase the relevant product under normal circumstances.
That is to say, suppose, a case where the supplier of a product in Region X intends to raise its price and is prevented from doing so because users in Region X are expected to purchase the same product from a supplier in Region Y. In this case, Region X and Region Y are considered to belong to the same geographic range.

Accordingly, similar to the case of the determination of the product range, there is a case in which the geographic range is determined both as region X and as region Y, which is a part of the former, if users in region Y especially tend to purchase a certain product from suppliers in region Y. Moreover, besides the substitutability for users, the substitutability for producers is determined based on the determination of the product range as described in Section 2.

In order to determine the geographic range of suppliers from whom a user will be able to purchase the relevant product under normal circumstances, the JFTC takes the following matters into consideration:

A. Business Area of Suppliers, the Area for Users to Shop Around, etc. The geographic range of the suppliers from whom a user will be able to purchase a product under normal circumstances is determined, with respect to products that are traded between business operators, for instance, taking into consideration the geographic range the user will shop around in search of the product, the supplier's business area covered by its sales network and its supply capability, etc. Also taken into consideration are the degree of difficulty in maintaining the freshness of the product, its properties including damage ability, weightiness or other properties, the ratio of its cost of transportation to its price, and whether such cost of transportation is greater than the difference that exists in its price between different regions where the product is sold, and so on.

Also the geographic range where users shop around in search of the product they want to purchase is taken into consideration principally in the case of a store-based retail business or service provider, etc.

Furthermore, in the case of a communications service provider or Internet-based service provider, etc. that provides service via communication lines, the JFTC will determine the geographic range considering the range within which a user will be able to enjoy the service provided by a supplier on the same terms and at the same quality or the range where the user can enjoy such service that is universally provided by suppliers among others.

B. Changes in prices, quantities and other matters
In some cases, the JFTC will take into consideration differences in price levels, movements in prices and quantities and other factors just as in the product range described in 2 above.

C. Recognition and actions of users

In the same manner as the product range described in 2 above, in some cases, the JFTC will take into consideration users' recognition and actions. (2) The concept in case geographical range is determined across borders. The basic concept in (1) described above will also apply when crossing borders. That is to say that if users, both inside and outside Japan for a certain product are conducting business without segregating domestic and foreign suppliers, even if suppliers try to raise the prices in Japan, the users in Japan will be able to substitute the purchase of products from overseas suppliers, which may obstruct the raising of prices in Japan. In that case, a geographical range has been determined across the border. For example, if a major domestic and overseas supplier is selling at a materially equivalent price in the sales areas worldwide (or in East Asia), and if the user is selecting their major supply source from suppliers around the world (or in East Asia), then a world (or East Asia) market will be determined.

### 4. Others

Depending on the reality of trade between a company group and its trading partners, distribution levels, the characteristics of the transaction with the specific trading partner and other factors are considered to delineate a particular field of trade based on the same criteria as those set out in Sections 2 and 3 above.

For example, there may be a case in which users who trade product X with the company group are divided into large customers and smaller customers, and specific trade conditions apply for the respective customer groups. In this case, if the price of product X for the smaller customers is increased, they cannot purchase product X for the large customers because of constraints on transportation and so product X for large customers cannot prevent the increase in the price of product X for the smaller customers. Consequently, particular fields of trade are determined for large customers and for small customers.

Part III. The Effect May Be Substantially to Restrain Competition

1. Interpretation of “The Effect May Be Substantially to Restrain