Silviase/jgov_v1.4_full_ann huggingface dataset:
patrolling the distributor’s retail establishments, conducting price supervision by salespersons dispatched to the distributor’s shops, examining the distributor’s ledgers or records and/or taking similar measures in order to ascertain whether or not the distributor sells the product at the indicated price;

an enterprise compels its distributors to sell the enterprise’s product at a price indicated by the enterprise, by detecting distribution channels through which the product is supplied to price-cutting distributors (through, for example making use of secret marks) and requesting distributors who make supply to such price-cutting distributors not to sell the product to them;

(e) an enterprise compels its distributors to sell the enterprise’s product at a price indicated by the enterprise, by buying the product from a price-cutting distributor and causing such price-cutting distributor or a distributor who supplied the product to the distributor to buy the product from the enterprise or pay the enterprise’s cost of purchase of the product; or

(f) an enterprise compels its distributors to sell the enterprise’s product at a price indicated by the enterprise, by transmitting complaints to a price cutting distributor which the enterprise receives from other distributors with regard to the price-cutting distributor’s low-price sales, and requesting the price-cutting distributors to end such sales.

(4) In cases where discriminatory treatment in the form of refusals to deal or provision of rebates, and so on, has been used to secure the effectiveness of restrictions on resale price, such conduct itself is illegal as unfair trade practices (Paragraph 2 (Other Refusal to Deal) or 4 (Discriminatory Treatment on Trade Terms, etc.) of the General Designation).

(5) For the purpose of Sub-Section (3) above, prices indicated by enterprises to distributors include both specific prices and any of the following types of prices:

a. a price within x% discount from the enterprise’s suggested retail price;

b. a price within a specific range (i.e., not less than JPY Y and not more than JPY Z);

c. a price approved in advance by the enterprise;

d. a price not less than that charged by nearby stores; or
e. a price suggested by the enterprise to distributors as the lowest limit by, for example, warning the distributors if they sell the product in question at any price lower than such suggested price.

(6) The guidance given in Sub-Sections (3), (4) and (5) above applies not only to an enterprise’s restriction on its direct trading partners (for example, a manufacturer’s restriction on wholesalers) but also to an enterprise’s restriction imposed on its indirect trading partners (for example, a manufacturer’s restriction on retailers or secondary wholesalers) either directly or indirectly via the enterprise’s direct trading partners (Article 2, Paragraph (9), Item (iv) of the Antimonopoly Act; Paragraph 2 or 4 of the General Designation).

(7) In cases where, in the following kinds of transactions, an enterprise’s direct trading partner only functions as a commission agent and it is deemed that in substance a sale is done by the enterprise, then the sale is usually not illegal even if the enterprise instructs a resale price to the direct trading partner, :

(i) in the case of consignment sales, and if the transaction is made with a consignor on its own risks and account so that a consignee bears no risk beyond that associated with its obligation to exercise the care of a good manager in storage of products, collection of payments, and so on, i.e., is not liable for loss of products, damage to them, or for unsold products; or

(ii) in the case of transactions where a supply price is negotiated and decided directly between a manufacturer and a retailer (or user), and the manufacturer instructs a wholesaler to deliver products to the retailer (or the user), and if the manufacturer is deemed, in substance, to sell the products to the retailers (or the user), under such circumstances that the wholesaler is charged only with responsibility for physical delivery of the products and collection of payment, and a fee is paid for such work.

## (Examples)

(i) Content Provider A engages in an online music distribution business. Content Provider A is planning to execute a consignment sales contract with Platformer B (an enterprise which runs a portal site), and the contract provides that Platformer B should provide online music distribution services at prices indicated by Content Provider A. Under the contract, Content Provider A engages Platformer B merely to upload music contents provided
by Content Provider A to Platformer B's servers and to collect prices of such music contents on behalf of Content Provider A, so providing music contents held by Content Provider A is deemed to in substance be done by Content Provider A directly to its users. Therefore, execution of the contract does not immediately constitute a problem under the Antimonopoly Act. (“3. Content provider's designation of prices for music content services,” 2004 Consultation Cases)

(ii) Company X is a manufacturer of Industrial Component A. Company X set its selling price of Industrial Component A charged to Customer Z through negotiations with Customer Z. Company X is planning to instruct its Agent Y to supply Industrial Component A to Customer Z at such price. (More specifically, Agent Y is responsible for physical delivery of Industrial Component A to Customer Z, collection of the payment from Customer Z and storage of Industrial Component A. A commission payable by Company X to Agent Y is the difference between Agent Y's sales price of Industrial Component A to Customer Z and Agent Y's purchase price of Industrial Component A from Company X.) Company X is deemed to in substance sell Industrial Component A directly to Customer Z because Agent Y is considered to bear minimal risks arising from its storage of Industrial Component A although, as stated above, Agent Y is responsible for delivery of Industrial Component A, collection of the payment and storage. In addition, Company X is deemed to exert few influence on price competition for Industrial Component A because Company X instructs only a price for Agent Y's supply of Industrial Component A to Customer Z and does not instruct prices applicable to Agent Y's sale of Industrial Component A to any customers other than Company Z or sale of Industrial Component A by any other agents other than Agent Y. Therefore, the said instruction by Company X to Agent Y does not immediately constitute a problem under the Antimonopoly Act. (“2. Restriction on an agent's resale price,” 2009 Consultation Cases)

### 3. Distribution Research

When an enterprise carries out a research on actual sales prices, customers, etc. of distributors handling the enterprise’s products (“distribution research”), such research itself is generally not illegal, unless the research is accompanied by
restrictions of sales prices of distributors such as imposing, notifying or suggesting imposition of curtailment of shipments or other economic disadvantage (including reduction of quantity shipped, raising of shipment price, reduction of rebate, refusal to supply other products) in the event that sales are not made at the enterprise’s indicated price.
### Chapter 2. Vertical Non-Price Restraints

### 1. Viewpoint

(1) As mentioned in Section 3 of Part I above, whether or not an enterprise’s vertical non-price restraint constitutes a violation of the Antimonopoly Act should be determined with reference to a type of such restraint on a case-by-case basis, analyzing its effect on competition in a market. Principles underlying the criteria for judging legality or illegality of major types of vertical non-price restraints are described in the following sections.

(2) As to whether or not a vertical non-price restraint is imposed by an enterprise, as is the case with restrictions on resale prices described in Section 2 of Chapter 1 above, it should be found that the enterprise imposes a vertical non-price restraint not only in cases where the enterprise imposes such restraint on its trading partners under a contract or by other means, but also in cases where the enterprise has taken any artificial means (such as imposing economic disadvantage on trading partners who do not comply with the enterprises' requests) to secure the effectiveness of the restraint.

2. Restrictions on Dealings with Competitors, etc.

(1) Restriction on trading partners’ dealing with competitors and/or trading partners’ handling of competing products

a. In cases where as a part of marketing activities, an enterprise may restrict its trading partners from dealing with its competitors. It is said that such restriction has managerial benefits. However, any such restriction may possibly impede current competitors' business activities and/or raise entry barriers, depending upon the enterprise's position in the market.

b. In cases where any below-listed conduct done by an influential enterprise in a market has foreclosure effects, such conduct is illegal as unfair trade practices (Paragraph 2 (Other Refusal to Trade), 11 (Trading on Exclusive Terms) or 12 (Trading on Restrictive Terms) of the General Designation): the
enterprise’s engaging in transactions with its trading partners on the condition that the trading partners should not deal with competitors of the enterprise or another enterprise having close relations with the enterprise (Note 6); the enterprise’s causing its trading partners to refuse to deal with competitors of the enterprise or another enterprise having close relations with the enterprise; or the enterprise’s engaging in transactions with its trading partners on the condition that the trading partners should limit their handling of products that compete with products of the enterprise or another enterprise having close relations with the enterprise (hereinafter referred to as “competing products”).

Whether or not a particular vertical non-price restraint has foreclosure effects should be determined in accordance with the guidance given in Part I, Sub-Section 3(1) above and Part I, Sub-Section 3(2)a above. For example, if products of an enterprise which imposes a vertical non-price restraint have a stronger brand value or the excess supply capacity of such enterprise's competitors is smaller as a whole, the vertical non-price restraint is more likely to have foreclosure effects, because availability of the enterprise's products is more important to its competitors and effectiveness of the restriction is greater. In addition, if a vertical non-price restraint is imposed for a longer period or on a larger number of competitors or if commercial transactions between an enterprise and its trading partner on which the enterprise imposes a vertical non-price restraint is more important to such trading partner, the vertical non-price restraint is more likely to have foreclosure effects. If two or more enterprises impose vertical non-price restraints respectively and parallel, those restraints are more likely to have foreclosure effects on the market as a whole than in the case where a single enterprise imposes a vertical non-price restraint.

(i) An influential material manufacturer in a market, by notifying or suggesting to a customer (which is a finished product manufacturer) that it intends to discontinue supply of its materials to the customer if the customer purchases corresponding parts from other parts manufacturers, requests the customer not to do so (Paragraph 11 of the General Designation);

(ii) an influential finished product manufacturer in a market requests an influential parts manufacturer in a market to refrain from selling its parts to the finished product manufacturer’s competitors or to restrict such supply, and obtains the supplier’s consent to do (Paragraph 11 or 12 of the
General Designation);

(iii) an influential manufacturer deals with a distributor on the condition that the manufacturer makes it mandatory for the distributor to handle only the manufacturer's products (Paragraph 11 of the General Designation);

(iv) an influential manufacturer in a market does business with a distributor under any condition which restricts the distributor from handling specific products (such as competing imported products) or from handling a specific enterprise's products (Paragraph 12 of the General Designation);

(v) an influential manufacturer deals with a distributor on the condition that the manufacturer restricts the distributor's handling of competing products by means of requiring the distributor to sell such a large volume of the manufacturer's products as is close to the distributor's selling capacity (Paragraph 12 of the General Designation); or

(vi) an influential manufacturer in a market causes distributors not to accept any offers of transactions from a specific manufacturer attempting to enter the market (Paragraph 2 of the General Designation).

(Note 6) A enterprise “having close relations with the enterprise” means one having common interests with the other. Whether or not an enterprise means one having common interests with another enterprise is to be judged on a case-by-case basis, taking comprehensively into consideration such factors as stockholding relationship, interlocking or dispatching of directorates, trading and financing relationship, and common membership of so-called corporate groups. The same applies throughout in these Guidelines.

c. In case where there is proper justification under the Antimonopoly Act for any enterprise’s restriction on its trading partner’s transactions with the enterprise’s competitors or its trading partner’s handling of competing products, the restriction is not illegal. For example;

(i) the case where a finished product manufacturer engages a parts manufacturer to manufacture parts for the former's product by making use of materials supplied by the former to the latter and the former requires the latter to sell those products exclusively to the former
(ii) the case where a finished product manufacturer engages a parts manufacturer to manufacture parts for the former's product, the former provides know-how (meaning and limited to know-how related to industrial technologies, and excluding any know-how that is not secret in nature) to the latter for the purpose of such manufacture, and the former requires the latter to sell those parts exclusively to the former, to the extent that such restriction is deemed necessary for keeping the know-how confidential or for preventing its unauthorized diversion.

d. The guidance given in Sub-Sections a, b and c above also applies to cases where an enterprise causes its direct trading partners to restrict their counterparties’ (e.g., a manufacturer causes wholesalers to restrict retailers’) dealing with the enterprise’s competitors and/or handling of competing products (Paragraph 2 or 12 of the General Designation).

## (2) Restrictions on Dealing with Competitors by Price Matching

a. Any enterprise’s reducing prices of its products in accordance with market conditions is indeed a manifestation of competition, and should be positively evaluated from a viewpoint of competition policies. However, in cases where the enterprise causes its customer to agree to continue business with the enterprise if it reduces its price to the extent that, as mentioned in Sub-Section b below, such price reduction is in response to lower prices offered by the enterprise’s competitors, then such conduct may reduce business opportunities available to the enterprise’s competitors.

b. In cases where an influential enterprise in a market causes its trading partner to agree to continue business with the enterprise on the condition that terms of any proposal, if any, made by the enterprise’s competitors to the trading partner should be made known to the enterprise, and that if the enterprise reduces its sales price to the same level as or to a more attractive level than prices quoted by the competitors, the trading partner should not deal with the competitors or should maintain the volume of transaction with the enterprise at the same level as before, and if such conduct has foreclosure effects, then such conduct is illegal as unfair trade practices (Paragraph 11 or 12 of the General Designation).
The guidance given in Sub-Section (1) (Enterprises’ restriction on trading partners’ dealing with competitors and/or trading partners’ handling of competing products) of this Section 2 applies to determination of whether or not a particular restriction has foreclosure effects.

### 3. Restrictions on Sales Territories

(1) In cases where as a part of marketing activities, enterprises may impose restrictions on distributors in terms of their sales territories. Such restrictions include the followings:

(i) an enterprise’s assigns a specific territory to each distributor as the area of the distributor’s primary responsibility, and imposes on the distributor the requirement that the distributor should carry out active marketing and sales activities within its own territory (i.e., establishment of an area of the distributor’s primary responsibility, not involving restrictions mentioned in (iii) or (iv) below; hereinafter referred to as “area-of-responsibility system”);

(ii) an enterprise limits areas where a distributor may establish outlets such as stores, or an enterprise designates a place where such outlets are to be established (i.e., restriction of locations of distributors' outlets, not involving restrictions mentioned in Clause (iii) or (iv) below; hereinafter referred to as "location system");

(iii) an enterprise assigns a specific area to each distributor and restricts the distributor’s sale of the enterprise’s products outside the assigned area (hereinafter referred to as “strict territorial restriction”); and

(iv) an 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 (hereinafter referred to as “restriction on passive sales to outside customers”); and

## (2) Area-of-responsibility system and location system

It is not illegal for an enterprise to adopt an area-of-responsibility system or a location system for the purpose of developing effective outlets for the products or securing a better system for provision of after-sales services for the products, unless such restriction falls under the category “strict territorial restriction” or “restriction on passive sales to outside customers”. The said restriction is not
illegal because it does not usually have price maintenance effects.

For example in sales through the Internet, it is usually not illegal for an enterprise to obligate distributors to engage in active marketing activities in specific areas and/or toward specific customer groups, such as publication of advertisements on websites of the distributors or third parties (including platforms) and issuance of mail magazines. However, if an enterprise's restriction falls under the category "strict territorial restriction" or "restriction on passive sales to outside customers" (including the case where an enterprise restricts distributors' sales to any areas or customers other than the specific ones), illegality of such restriction should be determined in accordance with the guidance given in Sub-Section (3) or (4) below.

## (3) Strict territorial restriction

In cases where an influential enterprise in a market imposes a strict territorial restriction on distributors and such restriction has price maintenance effects, the restriction is illegal as unfair trade practices (Paragraph 12 (Trading on Restrictive Terms) of the General Designation) (Note 7).

Whether or not a particular strict territorial restriction imposed by an enterprise has price maintenance effects should be determined in accordance with the guidance given in Part I, Sub-Section 3(1) above and Part I, Sub-Section 3(2)b above. For example, if a strict territorial restriction is imposed by an influential enterprise in the market under circumstances where inter-brand competition does not work well due to oligopolistic structure of the market and/or due to brand differentiation, then price competition for products included in the enterprise's brand may be impeded, and the restriction may have price maintenance effects. If two or more enterprises impose strict territorial restrictions respectively and parallel, those restrictions are more likely to have price maintenance effects on the market as a whole than in the case where a single enterprise imposes a strict territorial restriction.

(Note 7) If, in test marketing of a new product or in sale of local souvenirs, distribution areas of such products or souvenirs are restricted, such restriction usually does not have price maintenance effects and is not illegal.

## (4) Restriction on passive sales to outside customers
In cases where an enterprise imposes a restriction on a distributor’s passive sales to outside customers and such restriction has price maintenance effects, the restriction is illegal as unfair trade practices (Paragraph 12 of the General Designation).

Because restrictions on passive sales to outside customers even make it impossible for distributors to sell the products in response to outside customers' request, such restrictions have more effect of restricting intra-brand competition than strict territorial restrictions.

For example, in sales through the Internet, if a customer visits a website of a distributor and contacts the distributor and if such contact leads to a sale, then that is considered passive sales. The same is true if a customer chooses to continuously receive information such as mail magazines from the distributor, the customer places a purchase order with the distributor based upon the information and the purchase order leads to a sale. Under such circumstances, in the event that an enterprise assigns a specific area to the distributor and the customer's shipping address or another similar information reveal the address that is not within the distributor's territory, it constitutes a restriction on passive sales to an outside customer for the enterprise to cause the distributor to discontinue its dealings through the Internet with the customer. If such conduct has price maintenance effects, it is illegal as unfair trade practices.

(5) The guidance given in Sub-Sections (2), (3) and (4) above of this Section 3 also applies to cases where an enterprise causes its direct trading partners to restrict sales territories of their counterparties (for example, the case where a manufacturer causes wholesalers to restrict sales territories of retailers) (Paragraph 12 of the General Designation).

### 4. Restrictions on Distributors’ Trading Partners

(1) An enterprise may require and cause distributors to do business only with specified trading partners and to distribute the enterprise’s products only to those partners. Examples of such restriction include the following cases:

(i) an enterprise’s requiring each wholesaler to identify retailers that are the wholesaler’s customers, so that each of the retailers can buy the enterprise’s products only from that wholesaler (hereinafter referred to as “requirement of designated accounts”);