JAPAN Law and Practice Contributed by: Junichi Ueda, Etsuko Hara, Nobuto Shirane, Takahiro Hayase, Yutaka Shimoo and Miki Goto, Anderson Mori & Tomotsune
consultation, and the JFTC commences its review of the market situation and the potential substantive issues at the pre-notification stage. If it is evident that the transaction would not restrain competition in any relevant market and the notifying parties request the JFTC to short - en the waiting period in writing, the JFTC may shorten the waiting period. 6.3 Cartels Certain anti-competitive agreements and prac - tices such as price fixing and bid rigging are prohibited as an unreasonable restraint of trade under the Antimonopoly Act. Unreasonable restraint of trade is defined as business activities by which any enterprise, in concert with other enterprises, mutually restricts or conducts their business activities in such a manner as to fix, maintain or increase prices, or to limit produc - tion, technology, products, facilities or counter - parties, thereby causing a substantial restraint of competition in any relevant market. As for the interpretation of the elements of unrea - sonable restraint of trade, it is worth noting that – although “substantial restraint of competition” is one such element – the JFTC can easily prove that such a requirement is satisfied in the case of extreme cartel behaviour such as price fixing and bid rigging. It would therefore be difficult to justify extreme cartel behaviour in practice. Major methods of enforcement against unrea - sonable restraint of trade are cease-and-desist orders and surcharge payment orders. However, criminal penalties are also available. The amend - ment to the surcharge payment system came into effect on 25 December 2020. The amount of surcharge is calculated by multiplying the amount of sales of the target products or servic - es during the period in which the unreasonable
restraint of trade occurred (the maximum period is ten years) by the surcharge percentage rate. The rate is 10% in principle but can be lower, depending on the size of the alleged violators, or higher if there are aggravating factors (such as repeated violation). A leniency system for an unreasonable restraint of trade is available in Japan. The surcharge reduction rate, which was amended on 25 December 2020, is determined in accordance with the order of application for leniency as well as the degree of co-operation by the offender with the JFTC. In addition, a determination pro - cedure was introduced on 25 December 2020 to protect attorney–client communications in respect of legal advice regarding the alleged violations to which leniency is applicable (the “Specified Communication”). The scope of the protection under the determination procedure is limited compared to that which is available in similar circumstances in the USA or the EU. The requirements for qualifying for protection under the determination procedure include that: • the fact that the contents of the Specified Communication are recorded is indicated on the document itself (eg, “Specified Commu - nications under JFTC Investigation Rules” is written or printed on the cover); • the documents are stored separately from other documents that are not subject to the determination procedure; and • the company submits an application form for the determination procedure as well as a privilege log that states an outline of the relevant documents. A Supreme Court decision confirmed that, even where the alleged price cartel occurred outside Japan, the Antimonopoly Act can apply if the
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