JFTC’s policy to actively promote competition in response to social economics, such as digitalization: Coordinating and strengthening advocacy and enf…

JFTC’s policy to actively promote competition in response to social economics, such as digitalization: Coordinating and strengthening advocacy and enf…

June 23, 2022 0 By administrator

On June 16, 2022, the Japan Fair Trade Commission (“JFTC”) published a position paper, “Active promotion of competition policy in response to social economics, such as digitalization—coordinating and strengthening advocacy and enforcement” (the “Position Paper”).1 As one of the methods to strengthen enforcement, the JFTC may publicly announce suspected violations by digital platform operators even in the early stages of investigation, to solicit information and opinions from a wide range of third parties.

The JFTC will strengthen its response to social economics changes, such as digitalization, by making enforcement and advocacy the “two wheels of a cart” (i.e., two of the fundamental tools) for creating and maintaining competitive environments. The JFTC will eliminate violations and restore competition by strictly and properly enforcing the Anti-Monopoly Act (“AMA“) against trade practices, regulations and systems that are problematic under the AMA and/or competition policy, including conduct that stifles innovation. At the same time, JFTC’s advocacy efforts, in which it recommends improvements in trade practices and amendments of regulations and systems, will play an important role as well. Below are the main contents of the Position Paper.

1. Strengthening the effectiveness of advocacy

(1) Roles of market surveys

In order to properly implement advocacy, it is necessary to accurately understand the business activities and economic conditions of each industry, and a market survey is helpful for such understanding. One of the important pillars of advocacy is for the JFTC to issue reports and guidelines based on market survey results, point out issues under the AMA and competition policy, encourage stakeholders to voluntarily improve their practices as necessary, and make recommendations for regulatory authorities to review regulations and systems appropriately. Further, market survey results would also be helpful on the enforcement side when the JFTC finds conduct that constitutes a violation of the AMA.

  • (2) Target areas of market surveys

The JFTC will actively collect information on areas in which further promotion of fair and free competition is required in light of socioeconomic conditions, including the following areas.

  • Areas where competition is considered to be insufficient due to regulations and business practices, etc.
  • Areas where regulatory reform will expand opportunities for new entrants and where competition is expected to intensify.
  • Areas in which general consumers and SMEs may be unfairly disadvantaged.
  • Areas in which rapid market changes require prompt understanding of competition conditions and development of competitive rules, such as the digital market.

The JFTC will then conduct market surveys focusing on areas where antitrust and competition policy issues exist and where fair and free competition can be effectively promoted through the JFTC’s advocacy.

In addition, the JFTC will follow-up on the status…

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