Japanese Cartel Control in Transition

This paper has two main objectives. First, we explain the reasons for the renaissance in Japanese competition law enforcement, and second, we provide an overview of Japan’s anti-cartel regime. With regard to the first objective, in Part 1 of the paper we note the significance of the Strategic Impediment Initiative talks between Japan and the U.S. but we characterize those talks as a second-order factor, underlining instead the deeper issue of Japan’s stagnant economy. We observe that the old cultural assumption that economic recovery is possible without a genuine commitment to competitive markets and an effective competition policy has largely been overcome, and that this shifting economic ethos has enabled the JFTC to become a relatively more assertive enforcer. Additional factors highlighted include the leadership (2002-2012) of the former Chairman of the JFTC, and other influences such as the OECD’s evaluations of Japanese regulatory reform. As concerns the second objective of the paper, in Parts 2 and 3 we explain the basics of Japan’s anti-cartel regime. We review, inter alia, the rules on ‘substantial restraints on competition’ and the JFTC’s powers when it investigates and sanctions illegal conduct – either in cartel scenarios or, notoriously in Japan, bidrigging cases. Finally, in Part 4 we highlight recent developments such as the JFTC’s managerial transition under a new Chairman, and we briefly report on the amendments made to the Anti-Monopoly Act in December of 2013.