JAPAN Law and Practice Contributed by: Tsuyoshi Ikeda, Aya Yasui, Takuya Ohata and Kohei Kohara, Ikeda & Someya
• the market ranking and market share of the major players with which the parties have a horizontal or vertical relationship. Certain documents must be attached, depending on the type of transaction, such as a copy of the definitive agreement, financial statements and annual reports of the notifying party, a list of major shareholders, or the minutes of the shareholder meeting or board meeting that approves the transaction. If the filing is made by an attorney on behalf of the notifying party, a power of attorney (POA) is required. It should be noted that the POA is required even at a pre-notification process. In addition to the required information, the JFTC often requests – usually on a voluntary basis – additional information to review the transactions substantially, such as definitions of the product and geographic markets, the degree of competition between the par - ties, competitive pressures – including those arising from competitors, import products, new entries or customers – and efficiencies. Furthermore, the parties’ internal documents can be requested by the JFTC, including presentation mate - rials and the minutes of meetings such as board of directors’ meetings, materials used in analysis and decision-making processes and the emails of the per - sons concerned, which may refer to synergies, effects or competitive concerns, typically at a later stage of the review. Although the documents to be submitted are not required to be certified, notarised or apostilled, certi - fications by the company representative are required for copies of certain documents. 3.6 Penalties/Consequences of Incomplete or Inaccurate Notification If the notification is deemed incomplete, the JFTC will not accept it, in which case it may recommend the parties withdraw and refile an amended notification. Nevertheless, prior to said formal notification, par - ties can engage in a pre-notification consultation, in which a draft notification is submitted to the JFTC for review (a so-called draft check). This draft check process usually takes between a few days and a
couple of weeks. If a submitted draft notification is deemed incomplete, the JFTC can request the parties to amend the draft further. Filing inaccurate or misleading information is subject to a criminal penalty of up to JPY2 million, though no such penalty has yet been imposed, as far as is known. In addition, the JFTC can issue a cease-and-desist order at any time if it finds significant false or mislead - ing information in a notification, regardless of the time limit on its ability to issue an order. In other words, the JFTC can overturn its clearance decision at any time if there is significant false or misleading information in a notification. 3.7 Review Process It should be noted that the parties concerned can consult voluntarily with the JFTC in advance through the pre-notification process. When the JFTC accepts a formal notification, the statutory waiting period will commence (Phase I review). Phase I The JFTC has 30 calendar days from the date of a for - mal acceptance to review the transaction. The party/ parties can request the authority to shorten the wait - ing period on a discretionary basis; in practice, the period is shortened in a large number of cases. Note that a request for information from the JFTC does not suspend or reset the 30-day review period. If the JFTC comes to the conclusion that the transac - tion in question will not substantially restrain competi - tion, the clearance will be granted through a written decision stating that the JFTC will not issue a cease- and-desist order (a “Clearance Letter”). If the JFTC determines that it is necessary to conduct a more detailed review, the Phase II review will be trig - gered by officially requiring the filing party/parties to submit the necessary information or materials, which is called a “Request for Report, etc”. Phase II At the initiation of Phase II, the JFTC discloses the facts of its review and seeks public comments on its
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