JAPAN Law and Practice Contributed by: Tsuyoshi Ikeda, Aya Yasui, Hiroko Fukushima and Kohei Kohara, Ikeda & Someya
Phase I The JFTC has 30 calendar days from the date of a formal acceptance to review the transac - tion. The party/parties can request the authority to shorten the waiting period on a discretion - ary basis; in practice, the period is shortened in a large number of cases. Please 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 transaction in question will not substantially restrain competition, the clearance will be grant - ed 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 triggered by officially requiring the filing party/parties to submit the necessary infor - mation 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 com - ments on its website. The authority must con - clude the Phase II review within either 120 calen - dar days from the date of the JFTC’s acceptance of the notification or 90 calendar days from the date of acceptance of all the responses made in relation to the Request for Report, etc, which - ever is later. In practice, it usually takes several months, or even more than a year, for the JFTC to formally accept all the responses made in relation to the Request for Report, etc. While the suspensive effect is not applicable for the Phase II review period, in practice the par - ties are advised to refrain from completing the transaction until the clearance is granted.
If, following a Phase II review, the JFTC finds that the transaction will not substantially restrain competition, it will grant the clearance by issuing a confirmation letter stating that the JFTC will not issue a cease-and-desist order on the trans - action. When finding that the transaction could substantially restrain competition, the JFTC will afford the filing party an opportunity to express their opinions (including a proposal of remedies) and submit evidence before the JFTC’s final decision on whether to issue a cease-and-desist order. In any case, the results of the review will be made public. 3.9 Pre-Notification Discussions With Authorities Parties can discuss issues on a voluntary basis with the JFTC by means of a pre-notification consultation. During the consultation, the par - ties can submit written explanations concerning an overview of transactions and (potential) com - petitive issues, and discuss substantive issues including market definition and any other com - petitive concerns (such as high market shares or lack of strong competitive pressure from cur - rent or potential competitors). It should be noted that, if the pre-notification consultation is made by an attorney on behalf of the notifying party, a POA is required. The period of pre-notification depends mainly on the intention of the notifying parties. For instance, if the parties ask the JFTC just to review the draft of the formal notification, it will take only a few days, while in the case of compli - cated transactions, it is expected to take several months or more. The JFTC and the notifying parties regularly communicate confidentially in this process. If the parties have already publicly disclosed the trans - action, the JFTC may contact their competitors
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