Antitrust Lawyer Blog Commentary on Current Developments

JAPANESE ADVISORY PANEL ISSUES RECOMENDATIONS

On June 26, 2007 the Japanese Government’s Advisory Panel on Basic Issues Regarding the Anti-Monopoly Act (“the Panel”) concluded its series of roundtable discussions. Since 2005, the Panel has met in order to discuss and update the Act Concerning Prohibition of Private Monopolization and Maintenance of Fair Trade. The Panel was directed by the Chief Cabinet Secretary and heard testimony from a wide range of experts and concerned citizens. The statement issued by the Panel, and summarized below, is the culmination of these meetings.
This year’s Panel yielded a number of recommendations. These recommendations are understood to be suggestions for legislative policy. The Panel touched on: the administrative ex-post hearing procedure system, the administrative ex-ante hearing procedure system, and judicial review system directly before a district court.

In regard to these issues, the Panel issued four recommendations. They are as follows:

– To continue to maintain a system under which a surcharge (kacho-kin) and a criminal penalty coexist and are concurrently imposed is appropriate.

– As ihan-kin(“an administratively financial negative disposition imposed to deter violations”) is a measure for deterring violations, it should be set to a level sufficient to “deprive one of the motivation to engage in a violation.”

– It would be appropriate to make private monopolization (exclusionary type) subject to ihan-kin.

– In order to deter violations, it would be effective to have various enforcement measures linked to deterrence, such that it is expected that the functions of each measure will be fulfilled. Individual measures differ in terms of their respective aims and objectives, such that there is no need to endeavor to reconcile ihan-kin with civil compensation payments for damage from an institutional standpoint.

– It would be appropriate to maintain the system of administrative ex-post hearing procedures introduced in the 2005 revisions for the foreseeable future given that it appears to have yielded certain results, such as in terms of earlier disposition and a reduction in the number of cases involving hearing procedures

– From the viewpoint of further increasing the credibility of the administrative hearing procedures, it would be appropriate to implement the required measures in the composition of hearing examiners and the handling of decision drafts produced by hearing examiners.

– With respect to the modality of discovery in the administrative hearing procedures and preliminary procedures conducted by the JFTC, it would be appropriate to maintain the current system and approach to implementation in light of the need for consistency with other similar systems and the acceleration of procedures.

– While the current system shall be maintained with respect to the modality of administrative investigation procedures, such procedures shall be implemented by also taking into account the procedural protection of businesses.

– While we believe that it would be appropriate to continue to maintain a system of alerts and announcements based on the viewpoint of deterring violations, it would be appropriate to endeavor to improve regulations governing the main constituents, requirements, and form of and hearing mechanism used with alerts operating under the Anti-Monopoly Act and optimize the system of alerts and announcements in order to resolve the concerns of enterprises subject to such a system.

Camelia C. Mazard
202-589-1837
cmazard@dbmlawgroup.com