- COVID-19 Related News
In relation to the ongoing COVID-19 breakout, the following points should be kept in mind under the Japan Antimonopoly Act (“AMA”).
The AMA prohibits unfair trade practices (acts that tend to impede fair competition). In this regard, the Japan Fair Trade Commission (“JFTC”) has stated that tie-up arrangements wherein sales of expensive nutritional drinks and cosmetics are provided with masks should be avoided. On the other hand, in terms of sales of products such as face masks, the JFTC has clarified that it will not be deemed to be illegal resale price maintenance under the AMA in the case where manufacturers instruct their retailers to sell such products at a certain price or less for a limited period of time, to ensure that the retailers do not price gouge or set an unreasonably high price.
In addition, the JFTC, the Ministry of Health, Labor and Welfare, and the Ministry of Economy, Trade and Industry have requested that, in order to minimize the impact on sole proprietors and freelancers, business operators should give due consideration to providing sufficient consultation and documentation of the terms and conditions of transactions when changing contracts, providing flexible responses to extended delivery dates, and prioritizing orders. For more details of the request, please see the following link: https://www.meti.go.jp/english/press/2020/0310_003.html.
Additionally, the JFTC's press release during the response to the Great East Japan Earthquake (https://www.jftc.go.jp/soudan/shinsaikanren/index.html) can also be used as a reference when dealing with the issues surrounding the present COVID-19 breakout.
- JFTC Launches Digital Market Monitoring Office (April 1, 2020)
On April 1, 2020, the JFTC announced the establishment of the “Office of Policy Planning and Research for Digital Markets” as part of its proactive initiatives toward those markets.
It is planned that the new office will conduct a comprehensive survey on digital markets, such as a factual survey of trade practices, in cooperation with external experts.
- JFTC Report on Survey of Restaurant Portal Websites (March 18, 2020)
On March 18, 2020, the JFTC published a report on its survey of trade practices regarding restaurant listing websites and possible violations of the AMA. In the report, the JFTC has found that, although transactions involving restaurant portal websites do not currently constitute a violation of the AMA, certain conduct by restaurant portal websites tends to constitute abuse of superior bargaining position, discriminatory treatment on trade terms, interference with a competitor's transactions, private monopolization, etc. under the AMA. The JFTC has made it clear that it will closely monitor any change in the competitive environment surrounding restaurant portal websites and strict action will be taken against future violations.
- JFTC Approves Nihon Medi-Physics Commitment Plan (March 12, 2020)
On March 12, 2020, the JFTC has approved a Commitment Plan submitted by Nihon Medi-Physics Co., Ltd (“NMP”). As a result, the JFTC decided not to take administrative action against NMP as its alleged violation of the AMA was resolved by the Commitment Plan.
NMP was raided by the JFTC in June 2018 on suspicion of eliminating a new entrant (FUJIFILM RI Pharma Co., Ltd.) to the fludeoxyglucose market, a radiopharmaceutical used in the cancer screening test known as positron emission tomography.
This approval of the Commitment Plan by the JFTC was the second case of such approval after Rakuten's case in October 2019.
- JFTC Withdraws Petition for Urgent Temporary Suspension Order Against Rakuten (March 10, 2020)
Rakuten was planning to launch a free shipping policy from March 18, 2020; however, because the shop owners on Rakuten's portal marketplace had to bear such shipping costs, many shop owners raised concerns against Rakuten's new policy.
The JFTC announced its plan to investigate Rakuten's new policy based on the allegation that such policy was a violation of the AMA due to constituting an abuse of a superior bargaining position and raided Rakuten's headquarters on February 10, 2020.
On February 28, 2020, the JFTC filed a petition for an Urgent Temporary Suspension Order against Rakuten to ask the court to injunct Rakuten from implementing the new policy ( https://www.jftc.go.jp/en/pressreleases/yearly-2020/February/200228.html).
On March 6, 2020, Rakuten announced that it would allow vendors to have the discretion to choose whether to participate in the above measures scheduled to be implemented from March 18, in light of the impact of the spread of COVID-19. As a result, the JFTC withdrew its petition on March 10 due to the reduced urgency in the need to request the temporary suspension of Rakuten's new policy.
Although the petition has now been withdrawn, the JFTC is continuing its investigation into whether online vendors will be negatively affected by Rakuten's new policy.
- JFTC Imposes Surcharge on Torii Pharmaceutical for Price Fixing (March 5, 2020)
On March 5, 2020, the JFTC ordered Torii Pharmaceutical Co., Ltd. (“Torii”) to pay a surcharge of JPY 2.87 million for price fixing involving the anti-hypertension drug named “Calvin”. According to the issued order, Torii colluded with Nippon Chemiphar Co., Ltd. (“Nippon Chemiphar”) to match their wholesale price of Calvin.
Nippon Chemiphar was exempted from having to make the surcharge payment as it had filed a leniency application before the JFTC's investigation began.
Originally published by TMI Associates, on June 2020
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