Japanese competition law
Encyclopedia
Japanese competition law consists of the , officially the , and several other statutory laws.
The AMA was introduced during the postwar Allied occupation. The U.S. Government, on 6 September 1945, issued a presidential directive
instructing the Supreme Commander of the Allied Powers
(SCAP) to dissolve Zaibatsu
structures. Prior to World War II
, Japan
had no antitrust laws. There were seventeen Zaibatsu organisations, the four largest of which had controlled approximately a fourth of all of the paid-up capital in the Japanese economy just prior to the World War.
In opposition to General MacArthur's fear that Zaibatsu dissolution would lead to instability, the U.S. Departments of State and Justice sent a "Special Mission on Japanese Combines" to Japan for the implementation of a comprehensive antimonopoly framework. In response, MacArthur coerced the Japanese Diet into adopting legislation known as the Antimonopoly Act (AMA), with the persuasion to them that enforcement was optional.
The AMA led to the formation of Japan's Fair Trade Commission
(JFTC).
, the United States
backtracked on requiring Japan's enforcement of the AMA and instead encouraged the resurrection of Zaibatsu structures.
Japan which had grown increasingly independent of the United States in the 1950s, succumbed to pressures from Japanese business and need for recovery from economic depression due to the end of the Korean War
. The SCAP and the U.S. Government acquiesced to Prime Minister Yoshida's
actions to enact relaxations to the AMA when occupation of Japan ended with the implementation of the San Francisco Peace Treaty on 28 April 1952. All cartels illegal under the original AMA were effectively legalized.
and price fixing by Japanese oil companies further garnered public opinion in Japan against the weakness of the AMA and its lack of enforcement. The new articles introduced authorised the JFTC to dissolve or divest a company based on barriers against market-entry, lack of price benefit for consumers and unreasonable profits. The JFTC was authorised to impose fines for violations of the AMA.
s are still legalized with the following notes.
The AMA was introduced during the postwar Allied occupation. The U.S. Government, on 6 September 1945, issued a presidential directive
Presidential directive
Presidential Directives, better known as Presidential Decision Directives or PDD are a form of an executive order issued by the President of the United States with the advice and consent of the National Security Council...
instructing the Supreme Commander of the Allied Powers
Supreme Commander of the Allied Powers
Supreme Commander of the Allied Powers was the title held by General Douglas MacArthur during the Occupation of Japan following World War II...
(SCAP) to dissolve Zaibatsu
Zaibatsu
is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of World War II.-Terminology:...
structures. Prior to World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
had no antitrust laws. There were seventeen Zaibatsu organisations, the four largest of which had controlled approximately a fourth of all of the paid-up capital in the Japanese economy just prior to the World War.
In opposition to General MacArthur's fear that Zaibatsu dissolution would lead to instability, the U.S. Departments of State and Justice sent a "Special Mission on Japanese Combines" to Japan for the implementation of a comprehensive antimonopoly framework. In response, MacArthur coerced the Japanese Diet into adopting legislation known as the Antimonopoly Act (AMA), with the persuasion to them that enforcement was optional.
Antimonopoly Act
McArthur's AMA, which is still Japan's fundamental competition law, generalised prohibitions against three types of anticompetitive conduct.- private monopolization
- unreasonable restraints of trade and
- unfair methods of competition.
The AMA led to the formation of Japan's Fair Trade Commission
Fair Trade Commission (Japan)
The is a commission in the Japanese government responsible for enforcing Antimonopoly Act. The commission is commonly known as Kōtori or Kōtorii .As of 2010, the chairman is Kazuhiko Takeshima....
(JFTC).
Relaxation of the Act
The weakness of the AMA was due to vagueness requiring JFTC officials to be familiar with presumptions built into American antitrust laws. Seeing the need for stability and the growing threat of CommunismCommunism
Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
backtracked on requiring Japan's enforcement of the AMA and instead encouraged the resurrection of Zaibatsu structures.
Japan which had grown increasingly independent of the United States in the 1950s, succumbed to pressures from Japanese business and need for recovery from economic depression due to the end of the Korean War
Korean War
The Korean War was a conventional war between South Korea, supported by the United Nations, and North Korea, supported by the People's Republic of China , with military material aid from the Soviet Union...
. The SCAP and the U.S. Government acquiesced to Prime Minister Yoshida's
Shigeru Yoshida
, KCVO was a Japanese diplomat and politician who served as Prime Minister of Japan from 1946 to 1947 and from 1948 to 1954.-Early life:...
actions to enact relaxations to the AMA when occupation of Japan ended with the implementation of the San Francisco Peace Treaty on 28 April 1952. All cartels illegal under the original AMA were effectively legalized.
Strengthening of the Act
Amendments were made to strengthen the AMA in the 1970s due to, in part, pressures from American businesses. The 1973 oil crisis1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
and price fixing by Japanese oil companies further garnered public opinion in Japan against the weakness of the AMA and its lack of enforcement. The new articles introduced authorised the JFTC to dissolve or divest a company based on barriers against market-entry, lack of price benefit for consumers and unreasonable profits. The JFTC was authorised to impose fines for violations of the AMA.
Cartels still exist
However, the existence of cartelCartel
A cartel is a formal agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production. Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products...
s are still legalized with the following notes.
- Cartels calculate penalties beforehand and include such penalties as costs of business.
- Penalty calculations, which do not correlate with profits, present insufficient financial disincentives for businesses to collude.
- Courts in Japan lack contempt powersContempt of courtContempt of court is a court order which, in the context of a court trial or hearing, declares a person or organization to have disobeyed or been disrespectful of the court's authority...
to ensure compliance with the JFTC's cease and desist orders.