Table Speech

About Uric Acid
※Initiation speech does not appear

June 11, 2014

Mr. Kazushiro Yamaguchi
President & CEO, Nippon Chemiphar Co., Ltd.

Anti-Monopoly Act

June 11, 2014

Mr. Shigenori Shioda
Partner, Tanabe & Partners

 The Anti-Monopoly Act (AMA) is becoming increasingly important both domestically and internationally. The Surcharge Scheme against Cartels was introduced in 1977, and has been revised to strengthen it. Revisions include an increase of surcharge rates, expanding its coverage, enhancing criminal accusations, introducing the Leniency Program as well as implementing compulsory investigation measures to gather evidence. While there has been no big change in the number of AMA breaches, some large-scale scandals broke out that raised the total amount of surcharge payments as well as a number of criminal accusations.

 Antitrust enforcement and regulations in the US and EU countries are much more stringent, seen in the auto parts and financial services scandals. Especially in the US, severe financial penalties have been imposed and an increasing number of officers and employees have got prison sentences. As the world gets more globalized, the number of AMA cases keeps growing that involves competition authorities across multiple countries.

 Re-examining the governmental regulations has continued to be one of the key policy issues for successive Cabinets. The “Deregulation Action Program” was approved by the Cabinet in 1995, clarifying that “together with deregulation, the active development of competition policy will be pursued.” Today, the third arrow in the so-called Abenomics plan consists of regulatory reforms. Governmental regulations must be scrutinized whether their objectives are relevant, whether their scope best achieves the intended objective as well as whether they will not impede competition.

 The Leniency Program was introduced in 2006 that grants reductions in penalties to firms involved in cartels or bid-rigging, in exchange for discontinuing participation into the practice and for providing an active cooperation in the investigation of the enforcement authorities. The reduction ranges from full immunity to 50% or 30% reduction, depending on the timing and order of application for leniency. I have observed positive effects of this Program since its introduction. We have come to witness some cases in recent years where competition authorities across several countries set out simultaneously to investigate an international cartel. I believe effective implementation of the Leniency Program plays an instrumental role. Some shareholder lawsuits have taken place arising from the Leniency Program.

 Monopolization is prohibited by law in over 100 countries around the world, including the US and EU. While it is most commonly referred to as “competition act” throughout the world, the title varies from country to country. Yet there is not much difference in the basic rule stipulated in the law. In Japan, it is generally called the “Anti-Monopoly Act” but the full title is “Act on Prohibition of Private Monopolization and Maintenance of Fair Trade.” The scope of the Act is not limited to prohibiting private monopolization and stipulates comprehensive prohibition on unfair trade practices including cartels and bid-rigging as well as regulation on mergers.

 I sincerely hope the rules of the “Anti-Monopoly Act” will further take root and enhance fair and free competition that will eventually invigorate the Japanese economy.