Act on Prohibition of Private Monopolization and Maintenance of Fair Trade

A company with excessive concentration of economic power must not be established through shareholding (including equity interest; the same applies hereinafter) of other companies in Japan.

No company (including a foreign company; the same applies hereinafter) must become a company with excessive concentration of economic power in Japan by acquiring or holding shares of other companies in Japan.

The term "excessive concentration of economic power" in the preceding two paragraphs means that the overall business scale of a company, its subsidiary companies, and other domestic companies whose business activities it controls through shareholding, is extremely large across a considerable number of business fields; that a company, its subsidiary companies, and other domestic companies it controls have a great amount of power to influence other enterprises through transactions with their funds; or that a company, its subsidiary companies, and other domestic companies it controls occupy influential positions in a considerable number of interrelated fields of business; and that any of these factors have a large effect on the national economy and impede fair and free competition from moving forward.

If the sum of the total assets (meaning the amount of total assets calculated pursuant to the method provided in the Rules of the Japan Fair Trade Commission; hereinafter the same applies in this paragraph) of a company falling under any of the descriptions listed in the following items and its subsidiary companies (limited to total assets of companies in Japan), as aggregated pursuant to the method provided in the Rules of the Japan Fair Trade Commission, exceeds the amount provided by Cabinet Order, which must be no less than the amount listed in the relevant item, the company must submit, pursuant to the provisions of the Rules of the Japan Fair Trade Commission, a written report on its and its subsidiary companies' business to the Japan Fair Trade Commission within three months from the end of each business year provided, however, that this does not apply if the company is a subsidiary company of another company:

a company for which the ratio of the total acquisition value (or other value if it is so listed in the latest balance sheet) of the shares of subsidiary companies to the total assets of the relevant company exceeds fifty percent (referred to as "holding company" in the following item): six hundred billion yen;

a company that is engaged in banking, insurance, or Type I financial instruments business (meaning Type I financial instruments business as provided in Article 28, paragraph (1) of the Financial Instruments and Exchange Act (Act No. 25 of 1948); the same applies in paragraphs (3) and (4) of the following Article) (excluding holding companies): eight trillion yen; or

a company other than those listed in the preceding two items: two trillion yen.

The term "subsidiary companies" as used in the preceding two paragraphs means other companies in Japan of which the majority of the voting rights (excluding voting rights from shares for which voting rights cannot be exercised for all matters on which a resolution can be passed at the shareholders meeting, but including voting rights from shares that are deemed to confer voting rights pursuant to the provisions of Article 879, paragraph (3) of the Companies Act; hereinafter the same applies from this Article to Article 11, and Article 22, item (3), and Article 70-4, paragraph (1)) of all shareholders are held by another company. In this case, any other company in Japan of which majority of voting rights of all shareholders are held by a company and any one or more of its subsidiary companies or by any one or more subsidiary companies of a company is deemed as a subsidiary company of the relevant company.

In cases under the preceding paragraph, the voting rights held by a company or the voting rights held by a company and one or two or more of its subsidiary companies or by one or two or more of subsidiary companies of a company are to include the voting rights from shares that cannot be duly asserted against the issuer pursuant to the provisions of Article 147, paragraph (1) and Article 148, paragraph (1) of the Act on Book-Entry Transfer of Corporate Bonds and Shares.

A newly incorporated company that falls under a case provided in paragraph (4) at incorporation must notify the Japan Fair Trade Commission within thirty days from the date of its incorporation pursuant to the provisions of the Rules of the Japan Fair Trade Commission.