JAPAN Law and Practice Contributed by: Tsuyoshi Ikeda, Aya Yasui, Takuya Ohata and Kohei Kohara, Ikeda & Someya
5.6 Issuance of Decisions When the JFTC concludes that the business com - bination will not substantially restrict competition, it will issue a notice to the parties that it will not issue a cease-and-desist order. This notice is not available to the public. Regarding confidentiality, see 7.3 Confidentiality . 5.7 Prohibitions and Remedies for Foreign-to- Foreign Transactions The JFTC may issue a clearance subject to remedies for foreign-to-foreign transactions. It has issued con - ditional clearance for the following foreign-to-foreign transactions: • Korean Air Co, Ltd/Asiana Airlines Inc (FY2023); • Google LLC/Fitbit, Inc (FY2020); • JX Metals Deutschland GmbH/H.C. Starck Tanta - lum and Niobium GmbH (FY2018); • Qualcomm/NXP Semiconductors (FY2017); • Dow Chemical/DuPont (FY2016); and • Abbott Laboratories/St Jude Medical (FY2016). 6. Ancillary Restraints and Related Transactions 6.1 Clearance Decisions and Separate Notifications Neither the AMA nor the Merger Guidelines give express guidance regarding ancillary restraints or related arrangements. However, the JFTC may carry out in-depth assessment of ancillary restraints in its substantive review. If, in the course of the review process, the party reports ancillary restraints and the JFTC still issues clearance without raising any competition issue, it would be unlikely that the JFTC would challenge the transaction after the issuance of clearance in a practical sense. However, ancillary restraints are still in theory subject to challenges by the JFTC, even after the clearance.
During the pre-notification stage, the JFTC and the parties discuss the form and content of the noti - fication, and the competition issues related to the proposed transaction, but there are a few cases in which the parties and the JFTC negotiate a remedy in response to the JFTC’s competition concerns. 5.3 Legal Standard The legal standard for a prohibition (ie, cease-and- desist order) is whether a planned business combina - tion is likely to substantially restrict competition in a relevant market. Therefore, any remedy should allevi - ate a competition concern to the extent that substan - tial restraint of competition is eliminated so that the transaction can be approved by the JFTC. The Merger Guidelines supplement this point. The Merger Guidelines also state that the JFTC con - siders and examines the measures appropriate for removing the possibility of substantially restraining competition on a case-by-case basis for each busi - ness combination. The Merger Guidelines also clear - ly state that a structural remedy is the most effec - tive remedy and thus should be applied in principle, such as in business transfers. However, in practice, a behavioural remedy could be acceptable in many cases, if it is appropriate to resolve the JFTC’s com - petition concern. 5.4 Negotiating Remedies With Authorities Concerning when parties can begin negotiating rem - edies with the authorities, see 5.2 Parties’ Ability to Negotiate Remedies . 5.5 Conditions and Timing for Divestitures The Merger Guidelines state that remedies should, in principle, be fully carried out prior to the imple - mentation of the business combination. However, as an exception, remedies can be carried out after the clearance if the proposed remedy properly and clearly defines the deadline and the JFTC approves it. If the parties fail to carry out the remedies, the JFTC may issue cease-and-desist orders to prohibit the parties from implementing the business combination, or it may take measures to eliminate the substantial restraint of competition caused by the business com - bination.
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