Act on Prohibition of Private Monopolization and Maintenance of Fair Trade

The purpose of this Act is to promote fair and free competition, stimulate the creative initiative of enterprise, encourage business activity, heighten the level of employment and actual national income, and thereby promote the democratic and wholesome development of the national economy as well as secure the interests of general consumers by prohibiting private monopolization, unreasonable restraint of trade and unfair trade practices, preventing excessive concentration of economic power and eliminating unreasonable restraints on production, sale, price, technology, etc., and all other unjust restrictions on business activity through combinations, agreements, etc.

The term "enterprise" as used in this Act means a person who operates a commercial, industrial, financial, or other business. Any officer, employee, agent, or other person who acts for the benefit of any enterprise is deemed to be an enterprise with regard to the application of the provisions of the following paragraph or of Chapter III.

The term "trade association" as used in this Act means an association or federation of two or more enterprises whose main purpose is to promote common interests as enterprises and includes the following provided, however, that an association or federation of two or more enterprises which has capital or contributions made by the constituent enterprise, and whose main purpose is to engage in commercial, industrial, financial or other business for profit, and which is actually engaged in the business is not to be included:

any incorporated association or other association of which two or more enterprises are members (including those equivalent);

any incorporated foundation or other foundation for which two or more enterprises control the appointment and dismissal of directors or managers, the management of business or continuation of its existence; or

any partnership for which two or more enterprises are partners, or any contractual combination of two or more enterprises.

The term "officer" as used in this Act means a director, a company director, an executive officer, a managing member, an inspector, an auditor, or an equivalent, a manager, or a chief of business of the main or branch office.

The term "competition" as used in this Act means a state in which two or more enterprises, within the normal scope of their business activities and without making any material change to the facilities for, or kinds of, the business activities, engage in, or are able to engage in, any act listed in the following items:

supplying the same or similar goods or services to the same user; or

receiving supplies of the same or similar goods or services from the same supplier.

The term "private monopolization" as used in this Act means the business activities, by which any enterprise, individually or in combination, in conspiracy with another enterprise, or by any other manner, excludes or controls the business activities of other enterprises, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade.

The term "unreasonable restraint of trade" as used in this Act means the business activities, by which any enterprise, by contract, agreement or any other means irrespective of its name, in concert with other enterprise, mutually restrict or conduct their business activities in such a manner as to fix, maintain or increase prices, or to limit production, technology, products, facilities or counterparties, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade.

The term "monopolistic situation" as used in this Act means circumstances in which each of the following market structures and market harm exists in any particular field of business when the aggregate total value (this term refers to the prices of the relevant goods less an amount equivalent to the amount of taxes levied directly on the goods) of goods of the same description (including goods capable of being supplied without making any material change to the facilities for, or kinds of, the business activities; hereinafter referred to as "particular goods" in this paragraph) and those of any other goods having extremely similar functions and utility, which are supplied in Japan (excluding those exported), or the total value (this term refers to the prices of the relevant services less an amount equivalent to the amount of taxes levied on the recipient of the services with respect thereto) of services of the same description which are supplied in Japan, during the latest one-year period designated by Cabinet Order, exceeds one hundred billion yen:

a single enterprise's share of a field of business (meaning, out of the aggregate volume (if calculation in terms of volume is not appropriate, out of the aggregate value; hereinafter the same applies in this item) of the particular goods and any other goods with an extremely similar function and utility that are supplied in Japan (excluding those exported), or out of the aggregate volume of the services that are supplied in Japan, the ratio of particular goods and any other goods with an extremely similar function and utility or services that are supplied by the enterprise; hereinafter the same applies in this item) exceeding one-half or two enterprises' combined share of a field of business exceeding three-fourths during the relevant one-year period;

there are circumstances that make it extremely difficult for any other enterprise to newly enter the relevant particular field of business; and

a significant increase or a slight decrease in the price of the particular goods or services supplied by the relevant enterprise during a considerable period of time in light of the changes in supply and demand, and changes in the cost of supply, for the particular goods or services, and the enterprise falling under any of the following items during the period:

that the enterprise has made a profit at a rate far exceeding the profit rate specified by Cabinet Order as the standard for the business type specified by Cabinet Order to which the relevant enterprise belongs; or

that the enterprise has expended selling and general administrative expenses which are considered to be far exceeding the standard selling and general administrative expenses for the field of business to which the relevant enterprise belongs.

If a change in economic conditions results in an extreme change in domestic shipments from producers and wholesale prices, the amount in the preceding paragraph is to be separately provided for by Cabinet Order, in consideration of the conditions.

The term "unfair trade practices" as used in this Act means an act falling under any of the following items:

engaging, without justifiable grounds, in any of the following acts, in concert with a competitor:

refusing to supply to a certain enterprise or restricting the quantity or substance of goods or services supplied to a certain enterprise; or

causing another enterprise to refuse to supply a certain enterprise, or to restrict the quantity or substance of goods or services supplied to a certain enterprise.

unjustly and continually supplying goods or services at a price applied differentially between regions or between parties, thereby likely to cause difficulties to the business activities of other enterprise;

without justifiable grounds, continuously supplying goods or services at a price far below the cost incurred to supply them, thereby likely to cause difficulties to the business activities of other enterprises;

supplying goods to another party who purchases the relevant goods from oneself while imposing, without justifiable grounds, one of the restrictive terms listed below:

causing the party to maintain the selling price of the goods that one has determined, or otherwise restricting the party's free decision on selling price of the goods; or

having the party cause an enterprise that purchases the goods from the party to maintain the selling price of the goods that one has determined, or otherwise causing the party to restrict the relevant enterprise's free decision on the selling price of the goods.

unjustly engaging in any act specified in one of the following, by making use of one's superior bargaining position over the counterparty, in light of normal business practices:

causing the counterparty in continuous transactions (including a party with whom one newly intends to engage in continuous transactions; the same applies in (b) below) to purchase goods or services other than those to which the relevant transactions pertain;

causing the counterparty in continuous transactions to provide money, services or other economic benefits; or

refusing to receive goods in transactions with the counterparty, causing the counterparty to take back the goods after receiving them from the counterparty, delaying payment to the counterparty or reducing the amount of payment, or otherwise establishing or changing trade terms or executing transactions in a way that is disadvantageous to the counterparty;

any act falling under any of the following items, which is likely to impede fair competition and which is designated by the Japan Fair Trade Commission, other than the acts listed in the preceding items:

unjustly treating another enterprise in a discriminatory manner;

engaging in transactions at an unjust price;

unjustly inducing or coercing competitor's customers to transact with oneself;

transacting with another party on the conditions that will unjustly restrict the business activities of the counterparty;

taking unfair advantage of one's bargaining position to transact with the counterparty; or

unjustly interfering with a transaction between an enterprise in competition with oneself in Japan or a company of which one is a shareholder or an officer and another counterparty; or, if the enterprise is a company, unjustly inducing, instigating or coercing a shareholder or officer of the company to act against the company's interests.