Act on Prohibition of Private Monopolization and Maintenance of Fair Trade

No company must effect a joint incorporation-type split (meaning an incorporation-type split that a company effects jointly with another company; the same applies hereinafter) or an absorption-type split if any of the following items apply:

if the joint incorporation-type split or absorption-type split substantially restrains competition in a particular field of trade; or

if unfair trade practices have been employed in the course of the joint incorporation-type split or absorption-type split.

Every company that intends to become a party to a joint incorporation-type split, pursuant to the provisions of the Rules of the Japan Fair Trade Commission, must notify the Japan Fair Trade Commission in advance of its plan with regard to the joint incorporation-type split if any of the following items applies provided, however, that this does not apply if all the companies intending to become parties to the joint incorporation-type split belong to the same group of combined companies:

the total domestic sales amount of any one of the companies that intend to become parties to the joint incorporation-type split (limited to a company that intends to have the company incorporated through the joint incorporation-type split acquire all of its business (hereinafter in this paragraph "entire business succession company")) exceeds the amount specified by Cabinet Order, which must be no less than twenty billion yen, and the total domestic sales amount of any one of the other companies that intend to become parties to the same split (limited to an entire business succession company) exceeds the amount specified by Cabinet Order, which must be no less than five billion yen;

the total domestic sales amount of any one of the companies that intend to become parties to the joint incorporation-type split (limited to an entire business succession company) exceeds the amount specified by Cabinet Order, which must be no less than twenty billion yen, and the domestic sales of any one of the other companies that intend to become parties to the same split (limited to a company that intends to have the company incorporated through the joint incorporation-type split acquire a substantial part of its business (hereinafter in this paragraph "substantial part succession company")), in connection with the part of the business to be succeeded to, exceeds the amount specified by Cabinet Order, which must be no less than three billion yen;

the total domestic sales amount of any one of the companies that intend to become parties to the joint incorporation-type split (limited to an entire business succession company) exceeds the amount specified by Cabinet Order, which must be no less than five billion yen, and the domestic sales of any one of the other companies that intend to become parties to the same split (limited to a substantial part succession company), in connection with the part of the business to be succeeded to, exceeds the amount specified by Cabinet Order, which must be no less than ten billion yen (excluding cases that fall under the previous item); or

the domestic sales of any one of the companies that intend to become parties to the joint incorporation-type split (limited to a substantial part succession company), in connection with the part of the business to be succeeded to, exceeds the amount specified by Cabinet Order, which must be no less than ten billion yen, and the domestic sales of any one of the other companies that intend to become parties to the same split (limited to a substantial part succession company), in connection with the part of the business to be succeeded to, exceeds the amount specified by Cabinet Order, which must be no less than three billion yen.

Every company that intends to become a party to an absorption-type split must notify the Japan Fair Trade Commission in advance of its plan with regard to the absorption-type split pursuant to the provisions of the Rules of the Japan Fair Trade Commission if any of the following items applies provided, however, that this does not apply if all the companies intending to become parties to the absorption-type split belong to the same group of combined companies:

the total domestic sales amount of any one of the companies that intend to become parties to the absorption-type split (limited to a company that intends to alienate all of its business through the absorption-type split (referred to in the following item as "entire business succession company")) exceeds the amount specified by Cabinet Order, which must be no less than twenty billion yen, and the total domestic sales amount of the company that intends to succeed to the business through such a split exceeds the amount specified by Cabinet Order, which must be no less than five billion yen;

the total domestic sales amount of any one of the companies that intend to become parties to the absorption-type split (limited to an entire business succession company) exceeds the amount specified by Cabinet Order, which must be no less than five billion yen, and the total domestic sales amount of the company that intends to succeed to the business through the split exceeds the amount specified by Cabinet Order, which must be no less than twenty billion yen (excluding cases that fall under the previous item);

the domestic sales of any one of the companies that intend to become parties to the absorption-type split (limited to a company that intends to alienate a substantial part of its business through the absorption-type split (referred to in the following item as a "substantial part succession company")), in connection with the part of the business to be alienated, exceeds the amount specified by Cabinet Order, which must be no less than ten billion yen, and the total domestic sales amount of the company that intends to succeed to the business through such a split exceeds the amount specified by Cabinet Order, which must be no less than five billion yen; or

the domestic sales of any one of the companies that intend to become parties to the absorption-type split (limited to a substantial part succession company), in connection with the part of the business to be alienated, exceeds the amount specified by Cabinet Order, which must be no less than three billion yen, and the total domestic sales amount of the company that intends to succeed to the business through the split exceeds the amount specified by Cabinet Order, which must be no less than twenty billion yen (excluding cases that fall under the previous item).

The provisions of Article 10, paragraphs (8) through (14) apply mutatis mutandis to the restriction of joint incorporation-type splits and absorption-type splits under a notification pursuant to the provisions of the two preceding paragraphs and to the orders made by the Japan Fair Trade Commission pursuant to the provisions of Article 17-2, paragraph (1). In this case, the term "acquire the shares" in Article 10, paragraph (8) and paragraphs (10) through (14) is deemed to be replaced with "become a party to the joint incorporation-type split or to the absorption-type split"; in paragraph (9) of the Article, the terms "share acquisition" and "acquisition of shares" are deemed to be replaced with "joint incorporation-type split or absorption-type split"; the term "requested the share acquiring company" is deemed to be replaced with "requested at least one of the companies intending to become parties to the joint incorporation-type split or to the absorption-type split"; and the term "notify the share acquiring company" is deemed to be replaced with "notify the company intending to be a party to the joint incorporation-type split or to the absorption-type split".

No company must engage in a joint share transfer (meaning a share transfer carried out by a company jointly with another company; the same applies hereinafter) if it falls under either of the following items:

if the joint share transfer substantially restrains competition in a particular field of trade, or

if unfair trade practices have been employed in the course of the share transfer.

Every company that intends to engage in a joint share transfer must notify the Japan Fair Trade Commission in advance of its plan with regard to the share transfer pursuant to the provisions of the Rules of the Japan Fair Trade Commission if the total domestic sales amount of any one of the companies intending to be parties to the joint share transfer exceeds the amount provided by Cabinet Order, which must be no less than twenty billion yen, and the total domestic sales amount of any one of the other companies intending to be parties to the same joint share transfer exceeds the amount provided by Cabinet Order, which must be no less than five billion yen provided, however, that this does not apply if all the companies intending to be parties to the joint share transfer belong to the same group of combined companies.

The provisions of Article 10, paragraphs (8) through (14) apply mutatis mutandis to the restriction on joint share transfer pertaining to the notification under the preceding paragraph and to the order issued by the Japan Fair Trade Commission pursuant to Article 17-2, paragraph (1). In this case, the phrase "acquire the shares" in Article 10, paragraph (8) and the phrase "acquisition of shares" in paragraphs (10) through (14) of that Article are deemed to be replaced with "effect the joint share transfer" and "joint share transfer" respectively, and the phrases "share acquisition" and "acquisition of shares" in paragraph (9) of that Article are deemed to be replaced with "joint share transfer", the phrase "requested the acquiring company" with "requested at least one of the companies intending to engage in a joint share transfer", and the phrase "the share acquiring company" with "the companies intending to engage in a joint share transfer".

No company must engage in any of the following acts if the acts substantially restrain competition in any particular field of trade, nor must it engage in any of the following acts through unfair trade practices:

accepting assignment of the whole or a substantial part of the business of another company;

accepting assignment of the whole or a substantial part of the fixed assets used for the business of another company;

taking on a lease of the whole or a substantial part of the business of another company;

undertaking the management of the whole or a substantial part of the business of another company; or

entering into a contract which provides for a joint profit and loss account for business with another company.

Any company whose total domestic sales amount exceeds the amount provided by Cabinet Order, which must be no less than twenty billion yen must notify the Japan Fair Trade Commission in advance of its plan with regard to the acceptance of assignment of the business or the fixed assets used for the business (hereinafter in this Article "business, etc.") pursuant to the provisions of the Rules of the Japan Fair Trade Commission if either of the following items applies provided, however, that this does not apply if the company intending to accept assignment of the business, etc. and the company intending to assign the relevant business, etc. belong to the same group of combined companies.

the company intends to accept assignment of the whole business of another company whose domestic sales exceeds the amount provided by Cabinet Order, which must be no less than three billion yen; or

the company intends to accept assignment of a substantial part of the business or the whole or a substantial part of the fixed assets used for the business of another company, and the domestic sales in connection with the subject of the acceptance of assignment exceeds the amount provided by Cabinet Order, which must be no less than three billion yen.

The provisions of paragraphs (8) through (14) of Article 10 apply mutatis mutandis to the restriction of acceptance of assignment of business, etc. under a notification pursuant to the provisions of the preceding paragraph and the orders made by the Japan Fair Trade Commission pursuant to the provisions of Article 17-2, paragraph (1). In this case, the term "acquire the shares" appearing in Article 10, paragraph (8) and paragraphs (10) to (14) is deemed to be replaced with "accept assignment of the business or the fixed assets used for the business"; in paragraph (9) of the Article, the terms "share acquisition" and "acquisition of shares" are deemed to be replaced with "acceptance of assignment of the business or the fixed assets used for the business"; and the term "share acquiring company" is deemed to be replaced with "company intending to accept assignment of the business or the fixed assets used for the business".

No person may engage in any act, irrespective of the name given to that act, that evades the prohibitions and restrictions provided for in the provisions of Articles 9 through 16.

If an act in violation of the provisions of Article 10, paragraph (1); Article 11, paragraph (1); Article 15, paragraph (1); Article 15-2, paragraph (1); Article 15-3, paragraph (1); Article 16, paragraph (1); or the preceding Article has occurred, pursuant to the procedures provided in Section 2 of Chapter VIII the Japan Fair Trade Commission may order the enterprise concerned to dispose of all or some of its shares, transfer a part of its business or take any other measures necessary to eliminate the act in violation of the provisions.

If an act in violation of the provisions of Article 9, paragraph (1) or (2), Article 13, Article 14, or the preceding Article has occurred, pursuant to the procedures provided for in Section 2 of Chapter VIII, the Japan Fair Trade Commission may order the person violating the provisions to dispose of all or some of the person's shares, resign from the person's position as an officer of the company or take any other measures necessary to eliminate the act in violation of the provisions.

If companies have merged in violation of the provisions of Article 15, paragraph (2) and Article 10, paragraph (8) as applied mutatis mutandis pursuant to Article 15, paragraph (3) following the deemed replacement of terms, the Japan Fair Trade Commission may bring an action to have the merger declared invalid.

The provisions of the preceding paragraph apply mutatis mutandis to when companies have effected a joint incorporation-type split or an absorption-type split in violation of the provisions of Article 15-2, paragraphs (2) and (3) and Article 10, paragraph (8) as applied mutatis mutandis pursuant to Article 15-2, paragraph (4) following the deemed replacement of terms. In this case, the term "action seeking invalidation of the merger" in the preceding paragraph is deemed to be replaced with "action seeking invalidation of the joint incorporation-type split or the absorption-type split".

The provisions of paragraph (1) are applied mutatis mutandis to when companies have effected a joint share transfer in violation of provisions of Article 15-3, paragraph (2) and Article 10, paragraph (8) as applied mutatis mutandis pursuant to Article 15-3, paragraph (3) following the deemed replacement of terms. In this case, the term "action seeking invalidation of the merger" in paragraph (1) is deemed to be replaced with "action seeking invalidation of the joint share transfer".