Silviase/jgov_v1.4_full_ann huggingface dataset:
(ii) an enterprise’s prohibition of distributors from buying and selling the enterprise’s products among themselves (hereinafter referred to as “prohibition of sales among distributors”); and

(iii) an enterprise’s prohibition of wholesalers’ sale of the enterprise’s products to price-cutting retailers.

## (2) Requirement of designated accounts

If an enterprise imposes requirement of designated accounts on distributors and such requirement has price maintenance effects, the restriction is illegal as unfair trade practices (Paragraph 12 (Trading on Restrictive Terms) of the General Designation).

Under a scenario of requirement of designated accounts, an enterprise assigns particular retailers to each wholesaler as the wholesaler's trading partners and prohibits the wholesaler from accepting any offer, if any, made to the wholesaler by any retailer that has been assigned by the enterprise to any other wholesaler. This conduct by the enterprise is same as that the enterprise assigns a specific area to each distributor and restricts the distributor's sale of the enterprise's products to customers outside the assigned area upon such customers' request. Therefore, the guidance given in Part I, Chapter 2, Sub-Section 3(4) above "Restriction on passive sales to outside customers" applies to determination of whether or not a particular requirement of designated accounts has price maintenance effects.

## (3) Prohibition of sales among distributors

Because prohibition of sales among distributors imposes restrictions on selection of trading partners which is an essential element of transactions, the prohibition may lead to restrictions on distribution competition, depending upon a manner of the restrictions. If it has price maintenance effects, it is illegal as unfair trade practices (Paragraph 12 of the General Designation).

In cases where an enterprise prohibits sales among distributors for the purpose of prohibition of wholesalers' sale of the enterprise's products to price-cutting retailers described in Sub-Section (4) below, such prohibition of sales among distributors usually tends to impede price competition, and therefore, in principle, such prohibition is illegal as unfair trade practices (Paragraph 12 of the General Designation).
## (4) Prohibition of sales to price-cutting retailers

When an enterprise prohibits wholesalers from selling the enterprise’s products to a retailer on account of the retailer’s price-cutting (Note 8), such prohibition is an action involved in one of the most basic matters in an enterprise’s business activities that it independently determines its own sales price, in keeping with conditions in a market. Therefore, in light of the guidance given in Chapter I “Resale Price Maintenance” of this Part I, such prohibition usually tends to impede price competition, and is in principle illegal as unfair trade practices (Paragraph 2 (Other Refusal to Trade) or 12 of the General Designation).

An enterprise’s discontinuance of shipments to a distributor that is its current direct customer, on account of the distributor’s price-cutting (Note 8), also usually tends to impede price competition, and such conduct is in principle illegal as unfair trade practices (Paragraph 2 of the General Designation).

(Note 8) Whether or not such restriction is “on account of the distributor’s price-cutting” is to be objectively judged based on actual conditions of the transactions (including the enterprise’s response to other distributors, and related circumstances).

### 5. Selective Distribution

An enterprise may set up certain criteria to limit distributors that handle its products to those who meet the criteria. In such a case, the enterprise may prohibit distributors from reselling its product to other distributors who do not meet the criteria. This is called “selective distribution” and may result in such pro-competitive effects as described in Sub-Section 3(3) of Chapter 1 above. It is generally not problematic in itself even if, as a result of any enterprise’s adoption of the selective distribution, certain price-cutters (and/or other distributors) that do not satisfy the enterprise’s criteria are prevented from handling the enterprise’s product, to the extent that such criteria are deemed to have plausibly rational reasons from the viewpoint of the consumers’ interests such as preservation of quality of the product and/or assurance of appropriate use of the product and that such criteria are equally applied to other distributors who want to deal in the product.
### 6. Restrictions on Retailers’ Sales Methods

(1) Restrictions on retailers’ sales methods include the following types of restrictions:

(i) an enterprise’s instruction that a retailer should give demonstration sales of the enterprise’s products to customers;

(ii) an enterprise’s instruction that a retailer should provide customer delivery services for the enterprise’s products;

(iii) an enterprise’s specification of conditions for a retailer’s quality control of the enterprise’s products; and

(iv) an enterprise’s instruction that a retailer should establish a shelf space or a display area exclusively for the enterprise’s products.

(2) In cases where an enterprise’s restrictions on a retailer’s sales methods (excluding those on sales prices, sales territories and customers) are deemed to have plausibly rational reasons for the purpose of ensuring proper sales of the enterprise’s product, such as assurance of the safety of the product, preservation of its quality and maintenance of credit of its trademark, and if equivalent restrictions are applied to other retailers, such restrictions in themselves do not present problems under the Antimonopoly Act.

## (Examples)

(i) Company X, a manufacturer of Medical Device A, is planning to prohibit its trading partners from selling Medical Device A to mail-order customers and also from selling it to any enterprises that conduct mail-order businesses. (More specifically, if Company X obtains information that its trading partner sold Medical Device A to mail-order customers or to an enterprise that conducted a mail-order business, Company X requires the trading partner to discontinue such sale. If the trading partner fails to do so, Company X suspends its shipment of Medical Device A to the trading partner.) This business practice by Company X does not unreasonably restrict its trading partners' business activities and therefore does not constitute a problem under the Antimonopoly Act for the following reasons:

a. there are rational reasons for said business practice in light of the following observations:

(a) if Medical Device A is sold without adjustment, the device would be
significantly prevented from exerting its functions and such prevention would be highly likely to be disadvantageous to consumers;

(b) adjustment of Medical Device A cannot be done in the case of mailorders; and

(c) the said business practice of Company A imposes a minimum required restriction as it does not prohibit any of its business partners from selling to mail-order customers any devices that are not required by purchasing customers to be adjusted at the time of its sale to the customers;

b. equivalent restrictions are applied to all of Company A’s trading partners; and

c. some of Company A’s trading partners engaging in brick-and-mortar store sales are selling Medical Device A at prices significantly lower than Company A’s suggested retail price and accordingly this business practice of Company A is not deemed to impose a restriction on its business partners’ selling prices.

(“1. Medical device manufacturer’s prohibition of its business partners’ sale to mail-order customers,” 2011 Consultation Cases)

(ii) Company X, a manufacturer of Machine Product A, is planning to obligate retailers to give descriptions of functions of Company A's new product to general consumers. (More specifically, Company X requires retailers to cause the retailers' shop staff to give oral descriptions to general consumers or to post on the retailers' web-based shopping sites video clips created by Company A.) This business practice by Company X does not constitute a problem under the Antimonopoly Act for the following reasons:

a. the requirement of Company A is not excessive and Company A is deemed to have a rational reason for the purpose of ensuring proper sales of its new product; and

b. substantially equivalent restrictions are applied to all retailers dealing with Company A.

(“6. Machine manufacturer’s demand for descriptions of functions of its new product,” 2014 Consultation Cases)

However, in cases where restrictions on retailers’ sales methods are used by an enterprise as a means to restrict the retailers’ sales prices, handling of
competing products, sales territories, customers, etc. (Note 9), their illegality should be determined in accordance with the guidance given in Chapter 1 above and in Chapter 2, Sections 2 through 4 above (Article 2, Paragraph (9), Item (iv) of the Antimonopoly Act (Resale Price Restriction) and paragraph 11 (Dealing on Exclusive Terms) or 12 (Trading on Restrictive Terms) of the General Designation).

(Note 9) For example, in cases where a manufacturer stops shipments only to price-cutting retailers among those which do not observe the restrictions on sales methods on account of their nonobservance of the restrictions, the manufacturer is usually found to restrict sales price by means of the restrictions on sales methods.

(3) Furthermore, in cases where an enterprise imposes the following types of restrictions on ways of advertisements and representations (one category of marketing efforts), such practices are actions involved in one of the most basic matters in an enterprise's business activities that it independently determines its own sales price, in keeping with conditions in a market. Therefore, in light of the guidance given in Chapter 1 above (Resale Price Maintenance), these practices usually tend to impede price competition, and are in principle illegal as unfair trade practices (Paragraph 12 of the General Designation):

a. an enterprise’s restriction on prices shown by retailers at their stores, in their handbills or otherwise, or an enterprise’s prohibition of retailers’ advertisements which expressly indicates specific prices of the enterprise’s products; and

b. an enterprise’s causing its trading partners which operate magazines, newspapers or other advertising media to reject retailers’ advertisements which indicate the enterprise’s cut-price products or which expressly indicates specific prices of the enterprise’s products.

(4) The guidance given in Sub-Sections (2) and (3) above also applies to a case where an enterprise causes its direct trading partners to restrict sales methods of their counterparties (e.g., a manufacturer causes wholesalers to restrict sales methods of retailers) (Paragraph 12 of the General Designation).
### 7. Tie-in Sales

## (1) Viewpoint

Adding new values by offering multiple products tied or integrated together to trading partners is a method of technological innovation and sales promotion. Therefore, such conduct in itself does not immediately constitute a problem under the Antimonopoly Act.

However, in case where an enterprise compels its trading partner, in conjunction with the supply of a product (“tying product”) to the trading partner, to purchase another product (“tied product”) may possibly, for example, impede current competitors’ business activities and/or raise entry barriers in the market for tied product, depending upon the enterprise’s position in the market for tying product.

## (2) Cases where there are problems under the Antimonopoly Act

If an influential enterprise in a market for a product (“tying product”) compels its trading partner to purchase another product (“tied product”) in conjunction with the influential enterprise’s supply of the tying product to the trading partner and such conduct has foreclosure effects in a market for the tied product (Note 10), then the conduct is illegal as unfair trade practices (Paragraph 10 (Tie-in Sales, etc.) of the General Designation).

Whether or not a particular tie-in sales has foreclosure effects should be determined in accordance with the guidance given in Sub-Sections 3(1) and 3(2)a of Chapter 1 above. For example, if a tying product of an enterprise which engages in a tie-in sales has a larger market share or a tie-in sales has been implemented over a longer period or the number of counterparties, which a tying practice is related to, is larger, the tie-in sales is more likely to have foreclosure effects. Where the tied product is not differentiated in the market, it would be more likely that purchases of the tied product from the alleged enterprise may prevent competitors' tied products from being purchased, and therefore the tie-in sales is more likely to have foreclosure effects.

## (Example)

Each of Company X and Company Y engages in a software development and licensing business. Company X’s spreadsheet software product and Company Y’s word processing software had the largest shares in their respective
## markets

Company X feared that distribution of PCs equipped with only word processing software of Company Y (i.e., Company X's competitor) would seriously interfere with Company X's activities for increasing a market share of its own word processing software, and Company X caused enterprises engaging in manufacturing and distribution of PCs to accept contracts under which both the spreadsheet software the word processing software of Company X were to be installed on their PCs. Because of these contracts, the enterprises sold PCs incorporating Company X's spreadsheet software and word processing software, and consequently the share of Company X's word processing software increased and became the largest in the market.

This conduct by Company X was found to fall under Paragraph 10 of the General Designation and to violate the provisions of Article 19 of the Antimonopoly Act. (JFTC recommendation decision dated December 14, 1998; JFTC recommendation No. 21 of 1998)

(Note 10) Tie-in sales is illegal as unfair trade practices also if it tends to impede freedom of choice of customers and is an unjustifiable as competition means from a viewpoint of competition on the merits focusing on prices, quality and services. Whether or not a particular tie-in sales by an enterprise is an unjustifiable as competition means should be determined comprehensively taking into account a tying product's attractiveness, a tied product's characteristics, a manner of the tie-in sales, and spread of such an action in terms of the number of the enterprise's trading partner involved in the tie-in sales, repetitiveness and continuity of such an action, and propagation of such an action, etc.

(3) 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).

Assessment as to whether or not an enterprise “compels to purchase” in conjunction with supply of another product should depend upon whether or not, upon supply of the other product to them, objectively many customers are compelled to purchase the other product.

In addition, tie-in sales includes such conduct that an enterprise 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.
### Chapter 3. Provision of Rebates and Allowances

### 1. Viewpoint

(1) The nature of rebates and allowances provided by an enterprise to its trading partners (in general, meaning money paid on a systematic or case-by-case basis, separately from the billing price for products; hereinafter referred to as “rebates”) is diverse, including those that have the nature of adjusting the billing price, and those that have the purpose of promoting sales. Thus, rebates are paid for a variety of purposes, and rebates as one element of price also have the aspect of promoting price formation in keeping with actual conditions in a market. Accordingly, the provision of rebates in itself does not necessarily present a problem under the Antimonopoly Act.

## (Example)

Company X is an influential welfare equipment manufacturer in a market. In connection with sale of its Welfare Equipment A, Company X is planning to adopt a new rebate program available only to dealers engaging in brick-and-mortar store sales but not to dealers engaging in sales through the Internet. (More specifically, Company X imposes the following requirements: (i) a trading partner should train its sales personnel to appropriately describe Company X's products directly to general consumers visiting the trading partner's brick-and-mortar stores, and (ii) a trading partner should always keep inventory of each type of Welfare Equipment A at a specified level. If a trading partner meets both of these requirements, Company X provides the trading partner a rebate designed for supporting the partner in sales in the said manner. The amount of the rebate is fixed and does not fluctuate depending upon the trading partner's sales volume of Welfare Equipment A.) Although the rebate program is not available to dealers engaging in sales through the Internet, the rebate program is offered in order to cover cost of brick-and-mortar store sales and does not involve increase in Company X's wholesale prices charged to dealers engaging in sales through the Internet or otherwise restrict business activities of them. Therefore, the rebate program does not constitute a problem under the Antimonopoly Act. (“4. Welfare Equipment Manufacturer's Offering of Rebate Program Only to Trading Partners Engaging in Brick-and-mortar Store Sales,” 2013)
Consultation Cases)

(2) However, depending on the ways in which rebates are provided by an enterprise, they may restrict business activities of the enterprise’s trading partners and present problems under the Antimonopoly Act. In cases where an enterprise discretionally provides rebates to its trading partner without clear basis, and particularly if such opaque rebates account for a large percentage of the trading partner’s margin, they can have the effect of making it easy for the enterprise to conform the trading partner to the enterprise’s sales policy, and are most likely to restrict business activities of the trading partner. For this reason, it is desirable for enterprises to make clear the basis for payment of rebates, and inform the basis to their trading partners.

### 2. Cases Where There are Problems under the Antimonopoly Act

## (1) Rebates used as a means of restrictions on trading partners’ business activities

In the event that, by means of rebates, an enterprise restricts its trading partner’s sales prices, handling of competing products, sales territory, customers, etc. (including the case where a rebate provided by an enterprise to its trading partner is reduced if the trading partner does not sell the enterprise’s product at a price indicated by the enterprise), illegality of such restriction should be determined in accordance with the guidance given in Chapters 1 and 2 above (Article 2, Paragraph (9), Item (iv) of the Antimonopoly Act (Resale Price Restriction), and Paragraph 11(Trading on Exclusive Terms) or 12 (Trading on Restrictive Terms) of the General Designation).

Furthermore, an enterprise’s discriminatory provision of rebates to its trading partner depending on, for example, the trading partner’s selling prices of the enterprise’s products and/or its handling of competing products is illegal in itself as unfair trade practices, if such conduct has the same or similar function as or to the imposition of illegal restrictions on trading partners (Paragraph 4 (Discriminatory Treatment on Trade Terms, etc.) of the General Designation; the same also applies to (2), and (3) below).

The above assessment applies to cases where a so-called “repayment system” (i.e., a system under which an enterprise collects all or a part of a margin from its trading partner and pays it back after retaining the same for a certain period)
is used as a means of an illegal restriction on the trading partner, or has the same or similar function as or to the imposition of such restriction.

(2) Rebates which have the function of restricting trading partners' handling of competing products

An enterprise sometimes provides rebates to its trading partner according to a percentage of the trading partner's total sales during a specific period occupied by its sales of the enterprise's products, or according to a share that the enterprise's products have in the display of all products at the trading partner's store (hereinafter referred to as "coverage rebates"). In addition, an enterprise, in providing a volume rebate, may set progressive rebate rates according to ranking of its trading partners based on the quantity of products purchased by each trading partner from the enterprise during a certain period. In such a case, an enterprise's provision of rebates to its trading partner may have the function of restricting the trading partner's handling of competing products.

Whether an enterprise’s provision of rebates of these kinds has the function of restricting the trading partner’s handling of competing products or not should be examined by assessing level of rebates, threshold of giving rebates, progressiveness of rebates, retro-activeness of rebates, etc. comprehensively (Note 11).

### a. Coverage rebates

In cases where an enterprise’s provision of coverage rebates to its trading partner has the function of restricting the trading partner’s handling of competing products, its illegality should be determined in accordance with the guidance given in Sub-Section 2(1) (Enterprises’ restriction on trading partners’ dealing with competitors and/or trading partners’ handling of competing products) of Chapter 2 above.

That is, in cases where an influential enterprise in a market provides a coverage rebate to its trading partner, and if the provision has the function of restricting the trading partner's handling of competing products and as a result has foreclosure effects, such provision of the coverage rebate is illegal as unfair trade practices (Paragraph 4, 11, or 12 of the General Designation).

### b. Remarkably progressive rebates

While progressive rebates have the aspect of promoting price formation in