Refusal to Deal in Japan

Transcription

1 Refusal to Deal in Japan Naoko TERNISHI (Ms.) Japan Fair Trade Commission ICN Unilateral Conduct WS, Nov 12-13, 2015 in Istanbul, Turkey The views expressed in this presentation are solely those of the author and do not necessarily reflect the views of the JFTC.

2 Types of refusal to deal Direct refusal to deal Indirect refusal to deal Y B B

3 Legal basis Refusal to deal may be regulated either as private monopolization (rticle 2(5), rticle 3 of the Japanese ntimonopoly ct (M)) or as unfair trade practices (rticle 2(9), rticle 19). Private Monopolization (rticle 2(5), rticle 3) (5) The term "private monopolization" as used in this ct means such business activities, by which any enterprise, individually or by combination or conspiracy with other enterprises, or by any other manner, excludes or controls the business activities of other enterprises, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade. Exclusionary conduct is conduct that would cause difficulty for other companies to continues their business activities or for new market entrants to start their business activities, and includes refusal to supply and discriminatory treatment and exclusive dealing.

4 Legal basis (cont d) Unfair Trade Practices (rticle 2(9), Designation of Unfair Trade Practices item (2) and rticle 19) (9) The term "unfair trade practices" as used in this ct means an act falling under any of the following items: (vi) ny act falling under any of the following items, which tends to impede fair competition and which is designated by the Fair Trade Commission, other than the acts listed in the preceding items: Designation (Other Refusal to Trade) (2) Unjustly refusing to trade, or restricting the quantity or substance of goods or services pertaining to trade with a certain entrepreneur, or causing another entrepreneur to undertake any act that falls under one of these categories. (Trading on Exclusive Terms) (11) Unjustly trading with another party on condition that the said party shall not trade with a competitor, thereby tending to reduce trading opportunities for thesaid competitor.

5 nalyis of refusal to deal Freedom of choice of trading partners: an entrepreneur basically has the discretion to select to whom and on what conditions it supplies products. However, it could be a problem as a private monopolization when: (1) company refuses to deal beyond reasonable degree, (2) Concerning a product necessary to carry out business activities in the downstream market, (3) Causing a substantial restraint of competition in a relevant market Or, it could be a problem as an unfair trade practice when, for example,: dominant company refuses to deal as a means to achieve an unjust purpose under the ntimonopoly ct (e.g. Excluding its competitors from a market), which may make it difficult for the refused company to carry on business activities.

6 Case 1- NTT-East case (Supreme Court decision on December 17, 2010) Low price High connection fee Telecommunication industry- Fiber-optic communication service had a fairly large market share in almost the entire region of eastern Japan (upstream market) It was crucial for companies without a fiber-optic facility to access s facility in order to provide services in the market of fiber-optic communication services (downstream market) set the price in the downstream market lower than the level of connection fee other providers () paid to. ccording to the court decision, in order for a particular conduct to be regarded as an exclusionary conduct under the ntimonopoly law, the conduct must (1) have artificial nature and cannot be considered as a letigimate mean of competition and (2) make it substantially difficult for competitors to enter into the market.

7 Case 2- Nipro case (JFTC decision on June 5, 2006) α Foreign glass tube manufacturer Y B Glass tubes for ampoules, used as containers for injection solutions It was essential for companies manufacturing and selling ampoules (, B) to use α s glass tubes because pharmaceutical companies, the consumers, wished to use them. exclusively supplied α s product in western Japan. B purchased imported glass tubes together with α s glass tubes, manufactured and sold ampoules to consumers. refused to supply B with the glass tubes for ampoules of the same kind as those B imported, in an attempt to warn against and impose sanctions on the continuation or increase of B s handling imported glass tubes.