Japanese Cartel Control in Transition

Posted by Social Science Research Network

Japanese Cartel Control in Transition – Mel Marquis (European University Institute ; European University Institute – Department of Law) and Tadashi Shiraishi (University of Tokyo – Graduate Schools for Law and Politics)

ABSTRACT: 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.