- Chapter I General Provisions
- Chapter II Private Monopolization and Unreasonable Restraint of Trade
- Chapter III Trade Associations
- Chapter III-2 Monopolistic Situations
- Chapter IV Stockholdings, Interlocking Directors, Mergers, Demergers,and Acquisitions of Business
- Chapter V Unfair Trade Practices
- Chapter VI Exemptions
- Chapter VII Injunctions and Damages
- Chapter VIII Fair Trade Commission
- Chapter IX Lawsuits
- Chapter X Miscellaneous Provisions
- Chapter XI Penal Provisions
- Chapter XII Investigation, etc. of Criminal Cases
Act on Prohibition of Private Monopolization and Maintenance of Fair Trade
(Act No. 54 of April 14, 1947)
Table of contents Chapter I General Provisions (Articles 1 and 2) Chapter II Private Monopolization and Unreasonable Restraint of Trade
(Articles 3 to 7-2 inclusive) Chapter III Trade Associations (Articles 8 to 8-3 inclusive) Chapter III-2 Monopolistic Situations (Article 8-4) Chapter IV Stockholdings, Interlocking Directors, Mergers, Demergers, and
Acquisitions of Business (Articles 9 to 18 inclusive)
Chapter V Unfair Trade Practices (Articles 19 and 20)
Chapter VI Exemptions (Articles 21 to 23 inclusive)
Chapter VII Injunctions and Damages (Articles 24 to 26 inclusive)
Chapter VIII Fair Trade Commission
Section 1 Establishment, Duty, Affairs under the Jurisdiction and
Organization, etc. (Articles 27 to 44 inclusive)
Section 2 Procedures (Articles 45 to 70-22 inclusive)
Section 3 Miscellaneous Provisions (Articles 71 to 76 inclusive)
Chapter IX Lawsuits (Articles 77 to 88 inclusive)
Chapter X Miscellaneous Provisions (Article 88-2)
Chapter XI Penal Provisions (Articles 89 to 100 inclusive)
Chapter XII Compulsory Investigation of Criminal Cases, etc (Articles 101 to
118 inclusive)
Supplementary Provisions
Chapter I General Provisions
Article 1 The purpose of this Act is, by prohibiting private monopolization, unreasonable restraint of trade and unfair trade practices, by preventing excessive concentration of economic power and by eliminating unreasonable restraint of production, sale, price, technology, etc., and all other unjust restriction on business activities through combinations, agreements, etc., to promote fair and free competition, to stimulate the creative initiative of entrepreneurs, to encourage business activities, to heighten the level of employment and actual national income, and thereby to promote the democratic and wholesome development of the national economy as well as to assure the interests of general consumers.
Article 2 (1) The term "entrepreneur" as used in this Act means a person, who operates a commercial, industrial, financial or any other business. Any officer, employee, agent, or any other person who acts for the benefit of any entrepreneur shall be deemed to be an entrepreneur with regard to the application of the provisions of the following paragraph and of Chapter III. - (2)
- The term "trade association" as used in this Act means any combination or federation of combinations of two or more entrepreneurs having as its principal purpose the furtherance of their common interest as entrepreneurs and shall include the following; provided, however, that a combination or federation of combinations of two or more entrepreneurs, which has capital, or contribution made by the constituent entrepreneurs, and whose principal purpose is to operate and which is actually operating a commercial, industrial, financial or any other business for profit shall not be included:
- (i)
- Any incorporated association or other association of which two or more
entrepreneurs are members (including equivalent thereof);
- (ii)
- Any incorporated foundation or other foundation of which two or more
entrepreneurs control the appointment and dismissal of directors or
managers, the management of affairs or continuation of its existence;
(iii) Any partnership of which two or more entrepreneurs are partners, or any contractual combination of two or more entrepreneurs.
- (3)
- The term "director" as used in this Act means a director, an executive officer, a management member with unlimited liability, an inspector, an auditor, or an equivalent thereof, a manager, or a business manager of the main or branch office.
- (4)
- The term "competition" as used in this Act means a state in which two or more entrepreneurs, within the normal scope of their business activities and without making any material change to the facilities for, or kinds of, such business activities, engage in, or are able to engage in, any act listed in the following items.
- (i)
- Supplying the same or similar goods or services to the same user;
- (ii)
- Receiving supplies of the same or similar goods or services from the same supplier.
- (5)
- The term "private monopolization" as used in this Act means such business activities, by which any entrepreneur, individually or by combination or conspiracy with other entrepreneurs, or by any other manner, excludes or controls the business activities of other entrepreneurs, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade.
- (6)
- The term "unreasonable restraint of trade" as used in this Act means such business activities, by which any entrepreneur, by contract, agreement or any
other means irrespective of its name, in concert with other entrepreneurs, mutually restrict or conduct their business activities in such a manner as to fix, maintain, or increase prices, or to limit production, technology, products, facilities, or counterparties, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade.
- (7)
- The term "monopolistic situation" as used in this Act means circumstances in which each of the following market structures and negative effect in the market exist in any particular field of business where the aggregate total value (this term refers to the prices of the relevant goods less an amount equivalent to the amount of taxes levied directly on such goods) of goods of the same description (including goods capable of being supplied without making any material change to the facilities for, or kinds of, such business activities; hereinafter referred to as "particular goods" in this paragraph) and those of any other goods having an extremely similar function and utility thereto, which are supplied in Japan (excluding those exported), or the total value (this term refers to the prices of the relevant services less an amount equivalent to the amount of taxes levied on the recipient of such services with respect thereto) of services of the same description which are supplied in Japan, during the latest one-year period designated by a Cabinet Order, exceeds hundred billion yen:
- (i)
- Where the share of a field of business (this term refers to the ratio of the volume (in cases where calculation in terms of volume is not appropriate, volume shall be replaced with value; hereinafter the same shall apply in this item) of the said particular goods and any other goods having an extremely similar function and utility thereto, which are supplied in Japan (excluding those exported), or by the volume of the services, which are supplied in Japan, which are supplied by the relevant entrepreneur, to the aggregate total volume of the said particular goods and any other goods having an extremely similar function and utility thereto or services; hereinafter the same shall apply in this item) of an entrepreneur exceeds one-half or where the combined share of a field of business of two entrepreneurs exceeds three-fourths during the said one-year period;
- (ii)
- Where there exist conditions which make it extremely difficult for any other entrepreneur to be newly engaged in the said particular field of business;
(iii) Where the increase in the price of the said particular goods or services supplied by the relevant entrepreneur has been remarkable or the decrease therein has been slight for a considerable period of time in light of the changes in the supply and demand, or changes in the cost of supply, for such particular goods or services, and where, in addition thereto, the said entrepreneur falls under any of the following items during the said period: - (a)
- That the said entrepreneur has made a profit at the rate far exceeding
profit rate which is specified by a Cabinet Order as the standard for the type of business specified by a Cabinet Order to which the said entrepreneur belongs; or
- (b)
- That the said entrepreneur has expended selling and general administrative expenses which are considered to be far exceeding the standard selling and general administrative expenses for the field of business to which the said entrepreneur belongs.
- (8)
- In the event any change has occurred in the economic conditions resulting in an extreme change in domestic shipments from producers and wholesale prices, the amount in the preceding paragraph may be revised, after reflecting such conditions, by virtue of a Cabinet Order.
- (9)
- The term "unfair trade practices" as used in this Act means any act falling under any of following items, which tends to impede fair competition and which is designated by the Fair Trade Commission:
- (i)
- Unjustly treat other entrepreneurs in a discriminatory manner;
- (ii)
- Dealing with unjust consideration;
(iii) Unjustly inducing or coercing customers of a competitor to deal with
oneself;
- (iv)
- Dealing with another party on such conditions as will unjustly restrict the business activities of the said party;
- (v)
- Dealing with another party by unjust use of one's bargaining position;
- (vi)
- Unjustly interfering with a transaction between an entrepreneur in competition with it in Japan with oneself or a corporation of which oneself is a stockholder or an officer and another transaction counterparty; or, in case such entrepreneur is a corporation, unjustly inducing, instigating, or coercing a stockholder or an director of such corporation to act against the interests of such corporation.
- (10)
- The term "subsidiaries" as used in this Act means other corporations in Japan of which majority of voting rights (excluding voting rights pertaining to the stocks whose voting rights cannot be exercised as to all the matters regarding which a resolution can be passed at the stockholders' meeting, but including voting rights pertaining to the stocks which are deemed to have the voting rights pursuant to the provisions of paragraph 3 of Article 879 of the Companies Act (Act No. 86 of 2005); hereinafter the same shall apply in Chapter IV) of all stockholders (including all members; the same shall apply hereinafter) is held by another corporation.
Chapter II Private Monopolization and Unreasonable Restraint of Trade
Article 3 No entrepreneur shall effect private monopolization or unreasonable restraint of trade.
Article 4 Deleted.
Article 5 Deleted.
Article 6 No entrepreneur shall enter into an international agreement or an international contract which contains such matters as fall under unreasonable restraint of trade or unfair trade practices.
Article 7 (1) In case there exists any act in violation of the provisions of Article 3 or the preceding Article, the Fair Trade Commission may, pursuant to the procedures as provided for in Section 2 of Chapter VIII, order the relevant entrepreneur to cease and desist from the said acts, to transfer a part of his business, or to take any other measures necessary to eliminate such acts in violation of the said provisions.
(2) The Fair Trade Commission may, when it finds it particularly necessary, even when an act in violation of the provisions of Article 3 or the preceding Article has already ceased to exist, pursuant to the procedures as provided for in Section 2 of Chapter VIII, order the relevant entrepreneur, to take measures to make public that the said act has been discontinued and any other measures necessary to ensure elimination of the said act; provided, however, that this shall not apply to cases where three years have passed since the date of discontinuation of the said act.
Article 7-2 (1) In case any entrepreneur effects an unreasonable restraint of trade or enters into an international agreement or an international contract containing such matters as fall under unreasonable restraint of trade, and such act falls under any of the following items, the Fair Trade Commission shall order the said entrepreneur, pursuant to the procedures as provided for in Section 2 of Chapter VIII, to pay to the national treasury a surcharge of an amount equivalent to an amount calculated by multiplying the sales amount of the relevant goods or services calculated pursuant to the method provided for by a Cabinet Order (in the case that the said act is pertaining to the receipt of supply of goods or services, the purchase amount of the relevant goods or services calculated pursuant to the method provided for by a Cabinet Order), for the period from the date on which the entrepreneur effected the business activities constituting the said act to the date on which the business activities constituting the said act were discontinued (in case such period exceeds three years, the period shall be the three years preceding the date on which the business activities constituting the said act were discontinued; hereinafter referred to as "period of implementation") by ten percent (three percent in case of retail business, or two percent in case of wholesale business); provided, however, that in case the amount thus calculated is less than one million yen, the Commission shall not order the payment of such a surcharge. - (i)
- Pertaining to consideration of goods or services;
- (ii)
- Substantially restraining any of the following with respect to goods or
services and thereby affecting the consideration:
- (a)
- Supply or purchase volume;
- (b)
- Market share;
- (c)
- Transaction counterparties.
- (2)
- The provisions of the preceding paragraph shall apply mutatis mutandis to cases in which an entrepreneur effects private monopolization (limited to that arising from the control of the business activities of other entrepreneurs) that falls under any of the following items with respect to goods or services supplied by the said other entrepreneurs (hereinafter referred to as "controlled entrepreneurs" in this paragraph). In this case, the term "the sales amount of the relevant goods or services calculated pursuant to the method provided for by a Cabinet Order (in the case that the said act is pertaining to the receipt of supply of goods or services, the purchase amount of the relevant goods or services calculated pursuant to the method provided for by a Cabinet Order)" in the preceding paragraph shall be deemed to be replaced with "the sales amount of the relevant goods or services supplied by the said entrepreneur to the controlled entrepreneurs (including goods or services necessary for supply by the said controlled entrepreneurs of the said goods or services in any particular field of trade pertaining to the said act) and of the said goods or services supplied by the said entrepreneur in the said particular field of trade (excluding those supplied to the said controlled entrepreneurs) calculated pursuant to the method provided for by a Cabinet Order", and the term "(three percent in case of retail business, or two percent in case of wholesale business)" shall be deemed to be replaced with "(three percent in the case that the said entrepreneur engages in retail business or two percent in the case that the said entrepreneur engages in wholesale business)".
- (i)
- Pertaining to the consideration;
- (ii)
- Substantially restraining any of the following and thereby affecting the
consideration:
- (a)
- Supply volume;
- (b)
- Market share;
- (c)
- Transaction counterparties.
- (3)
- The term "market share" provided for in the preceding two paragraphs means the ratio of the volume of goods or services that one or two or more entrepreneurs supply or receive supply of, to the aggregate total volume of the said goods or services supplied in any particular field of trade within a
particular period, or the ratio of the value of goods or services that one or two or more entrepreneurs supply or receive supply of, to the aggregate total value of the said goods or services supplied in any particular field of trade within a particular period.
- (4)
- In the case referred to in paragraph 1, the term "ten percent" appearing in that paragraph shall be "four percent," the term "three percent" shall be "one point two percent," and the term "two percent" shall be "one percent" if the said entrepreneur falls under any of the following items:
- (i)
- Any corporation whose amount of capital or total amount of contribution is not more than three hundred million yen and any corporation or individual whose number of regular employees is not more than three hundred, which operates as its principal business, business belonging to manufacturing business, construction business, transportation business, or any other business (excluding the lines of businesses listed in items 2 to 4 inclusive and the lines of businesses provided for by a Cabinet Order pursuant to item 5);
- (ii)
- Any corporation whose amount of capital or total amount of contribution is not more than one hundred million yen and any corporation or individual whose number of regular employees is not more than one hundred, which operates as its principal business, business belonging to wholesale business (excluding the lines of businesses provided for by a Cabinet Order pursuant to item 5);
(iii) Any corporation whose amount of capital or total amount of contribution is not more than fifty million yen and any corporation or individual whose number of regular employees is not more than one hundred, which operates as its principal business, business belonging to service business (excluding the lines of businesses provided for by a Cabinet Order pursuant to item 5); - (iv)
- Any corporation whose amount of capital or total amount of contribution is not more than fifty million yen and any corporation or individual whose number of regular employees is not more than fifty, which operates as its principal business, business belonging to retail business (excluding the lines of businesses provided for by a Cabinet Order pursuant to the following item);
- (v)
- Any corporation whose amount of capital or total amount of contribution is not more than the amount provided for by a Cabinet Order for a certain line of business and any corporation or individual whose number of regular employees is not more than the number provided for by a Cabinet Order for that line of business, which operates as its principal business, business belonging to any of the lines of business provided for by such Cabinet Order;
- (vi)
- Of cooperative partnerships and other partnerships established pursuant to special Acts with the principal purpose of cooperation in business
(including federation of partnerships), any partnership which has a scale comparable to the scale provided for in each of the preceding items for the individual line of business in the preceding items as provided for by a Cabinet Order. - (5)
- In the case that an entrepreneur is ordered to pay a surcharge pursuant to the provisions of paragraph 1, the term "ten percent" appearing in paragraph 1 shall be "eight percent," the term "three percent" shall be "two point four percent", the term "two percent" shall be "one point six percent", the term "four percent" in the preceding paragraph shall be "three point two percent", the term "one point two percent" shall be "one percent", and the term "one percent" shall be "zero point eight percent" if the said entrepreneur had discontinued the relevant violation (limited to cases where the period of implementation pertaining to the violation is less than two years, except for cases that fall under the next paragraph) by the day one month prior to the date when the measure listed in item 4 of paragraph 1 of Article 47 or the measure as provided for in paragraph 1 of Article 102 was first made in relation to the case pertaining to the said violation (hereinafter referred to as "investigation start date" in this Article) (if the said measure is not made, the day one month prior to the date when the said entrepreneur received the notice pertaining to the said violation pursuant to the provisions of paragraph 5 of Article 49, as applied mutatis mutandis pursuant to paragraph 6 of Article 50 after deemed replacement (hereinafter referred to as "advance notice" in next paragraph and paragraph 7)).
- (6)
- In the case that an entrepreneur is ordered to pay a surcharge pursuant to the provisions of paragraph 1 (including the cases where it is applied mutatis mutandis pursuant to paragraph 2 after deemed replacement; hereinafter the same shall apply in this paragraph), the term "ten percent" appearing in paragraph 1 shall be "fifteen percent", the term "three percent" shall be "four point five percent", the term "two percent" shall be "three percent", the term "four percent" appearing in paragraph 4 shall be "six percent", the term "one point two percent" shall be "one point eight percent", and the term "one percent" shall be "one point five percent" if the said entrepreneur is a person falling under any of the following items:
- (i)
- A person having received an order pursuant to the provisions of paragraph 1 (limited to cases where the said order has become final and binding; the same shall apply in the following item), or a person having received a notice pursuant to the provisions of paragraph 13 or 16, or a decision pursuant to the provisions of paragraph 2 of Article 51 within ten years counting retroactively from the investigation start date;
- (ii)
- A person having received an order pursuant to the provisions of paragraph 1, or a person having received a notice pursuant to the provisions of
paragraph 13 or 16, or a decision pursuant to the provisions of paragraph 2 of Article 51 within ten years counting retroactively from the date when the entrepreneur received the advance notice pertaining to the said violation in the case that neither the measure listed in item 4 of paragraph 1 of Article 47 nor the measure provided for in paragraph 1 of Article 102 was made. - (7)
- Notwithstanding the provisions of paragraph 1, the Fair Trade Commission shall not order the entrepreneur to pay a surcharge if the relevant entrepreneur that is to pay a surcharge pursuant to the provisions of paragraph 1 falls under both of the following items:
- (i)
- The entrepreneur is the first among the entrepreneurs that committed the relevant violation to individually submit reports and materials regarding the facts pertaining to the said violation to the Fair Trade Commission pursuant to the provisions of the Rules of the Fair Trade Commission (excluding cases where the said reports and materials are submitted on or after the investigation start date (the date when the entrepreneur received an advance notice pertaining to the said violation in the case that neither the measure listed in item 4 of paragraph 1 of Article 47 nor the measure provided for in paragraph 1 of Article 102 was made; the same shall apply in the following item and the following paragraph) in relation to the case pertaining to the said violation);
- (ii)
- The entrepreneur has not committed the relevant violation since the
investigation start date in relation to the case pertaining to the said
violation.
- (8)
- In the case of paragraph 1, the Fair Trade Commission shall reduce the relevant surcharge by the amount calculated by multiplying by fifty percent the surcharge calculated pursuant to the provisions of paragraph 1 or 4 to 6 inclusive in the case that the entrepreneur falls under items 1 and 3 of this paragraph, or by the amount calculated by multiplying by thirty percent the surcharge calculated pursuant to the provisions of paragraph 1 or 4 to 6 inclusive in the case that the entrepreneur falls under items 2 and 3 of this paragraph, respectively:
- (i)
- The entrepreneur is the second among the entrepreneurs that committed the relevant violation to individually submit reports and materials regarding the facts pertaining to the said violation to the Fair Trade Commission pursuant to the provisions of the Rules of the Fair Trade Commission (excluding cases where the said reports and materials are submitted on or after the investigation start date in relation to the case pertaining to the said violation);
- (ii)
- The entrepreneur is the third among the entrepreneurs that committed the violation to individually submit reports and materials regarding the facts pertaining to the said violation to the Fair Trade Commission pursuant to
the provisions of the Rules of the Fair Trade Commission (excluding cases where the said reports and materials are submitted on or after the investigation start date in relation to the case pertaining to the said violation); (iii) The entrepreneur has not committed the relevant violation since the
investigation start date in relation to the said violation.
- (9)
- In the case of paragraph 1, the Fair Trade Commission shall reduce the relevant surcharge by the amount calculated by multiplying by thirty percent the surcharge calculated pursuant to the provisions of paragraph 1 or 4 to 6 inclusive in the case that the entrepreneur that committed the relevant violation falls under both of the following items if the number of entrepreneurs who submitted reports and materials regarding the relevant violation pursuant to the provisions of item 1 of paragraph 7 or item 1 or 2 of the preceding paragraph is fewer than three (limited to the cases where the sum of the number of entrepreneurs who submitted reports and materials pursuant to the provisions of item 1 of paragraph 7 or item 1 or 2 of the preceding paragraph and the number of entrepreneurs who submitted reports and materials pursuant to the provisions of item 1 below is three or fewer):
- (i)
- The entrepreneur individually submitted reports and materials regarding the facts pertaining to the said violation (excluding reports and materials related to the facts already ascertained by the Fair Trade Commission through measures listed in the items of paragraph 1 of Article 47 or provided for in paragraph 1 of Article 102 or other means) to the Fair Trade Commission pursuant to the provisions of the Rules of the Fair Trade Commission, by the deadline set in the Rules of the Fair Trade Commission on or after the investigation start date in relation to the case pertaining to the said violation;
- (ii)
- The entrepreneur has not committed the relevant violation since the date of submission of the reports and materials pursuant to the preceding item.
- (10)
- When the Fair Trade Commission receives the submission of reports and materials pursuant to the provisions of item 1 of paragraph 7, item 1 or 2 of paragraph 8, or item 1 of paragraph 9, the Fair Trade Commission shall promptly notify in writing the entrepreneur that submitted the said reports and materials of that fact.
- (11)
- Prior to issuing an order pursuant to the provisions of paragraph 1 or a notice pursuant to the provisions of paragraph 13 to an entrepreneur who falls under any of the provisions of paragraph 7 to 9 inclusive, the Fair Trade Commission may additionally request the said entrepreneur to submit reports or materials regarding the facts in relation to the relevant violation.
- (12)
- If the Fair Trade Commission finds that a fact that falls under any of the following items exists before issuing an order pursuant to the provisions of
paragraph 1 or a notice pursuant to the provisions of next paragraph to entrepreneurs that submitted reports and materials pursuant to the provisions of item 1 of paragraph 7, item 1 or 2 of paragraph 8, or item 1 of paragraph 9, these provisions shall not apply, notwithstanding the provisions of paragraphs 7 to 9 inclusive: - (i)
- The report or materials submitted by the relevant entrepreneur contained false information;
- (ii)
- In the case of the preceding paragraph, the said entrepreneur fails to
submit the requested reports or materials or submits false reports or
materials;
(iii) In the case pertaining to the violation committed by the relevant entrepreneur, the said entrepreneur coerced another entrepreneur to commit the violation provided for in paragraph 1 or blocked another entrepreneur from discontinuing the said violation. - (13)
- If the Fair Trade Commission has decided not to order the payment of a surcharge pursuant to the provisions of paragraph 7, the Commission shall notify in writing the relevant entrepreneur of that decision at the time of issuing an surcharge payment order to entrepreneurs other than the said entrepreneur regarding the case pertaining to the violation committed by the entrepreneur that falls under the provisions of paragraph 7 (by the deadline provided for in the Rules of the Fair Trade Commission in the case that the Fair Trade Commission does not issue an order pursuant to the provisions of paragraph 1; the same shall apply in paragraph 16).
- (14)
- In the case of paragraph 1 (including the cases where it is applied mutatis mutandis pursuant to paragraph 2 after deemed replacement; hereinafter the same shall apply in this paragraph and in paragraphs 17 and 18), if there is a final and binding decision regarding the same case sentencing the relevant entrepreneur to a fine, the Fair Trade Commission shall, instead of the amount calculated pursuant to the provisions of paragraphs 1, 4 to 6 inclusive, 8, or 9, deduct from the said amount the amount equivalent to one-half of the amount of the said fine; provided, however, that this shall not apply if the surcharge amount calculated pursuant to the provisions of paragraphs 1, 4 to 6 inclusive, 8, or 9 does not exceed the amount equivalent to one-half of the amount of the said fine, or if the surcharge amount after the said deduction is less than one million yen.
- (15)
- In the case of the proviso in the preceding paragraph, the Fair Trade Commission shall not order payment of the surcharge.
- (16)
- In the case that the Fair Trade Commission does not order payment of a surcharge pursuant to the provisions of the preceding paragraph, the Commission shall notify in writing the fined entrepreneur of that fact at the time of issuing an order pursuant to the provisions of paragraph 1 (including
the cases where it is applied mutatis mutandis pursuant to paragraph 2 after deemed replacement) to entrepreneurs other than the said entrepreneur regarding the case pertaining to the violation provided for in paragraph 1 or 2 committed by the said entrepreneur.
- (17)
- Any entrepreneur who has received an order pursuant to the provisions of paragraph 1 shall pay the surcharge calculated pursuant to the provisions of paragraphs 1, 4 to 6 inclusive, 8, 9, and 14.
- (18)
- In case the amount of surcharge calculated pursuant to the provisions of paragraphs 1, 4 to 6 inclusive, 8, 9, and 14 contains a fraction less than ten thousand yen, such fraction shall be disregarded.
- (19)
- In the case that the entrepreneur who has committed a violation provided for in paragraph 1 or 2 is a company and if the said company has ceased to exist by virtue of a merger with another company, a violation committed by the said company and an order pursuant to the provisions of paragraph 1 (including the cases where it is applied mutatis mutandis pursuant to paragraph 2 after deemed replacement), a notice pursuant to the provisions of paragraphs 13 and paragraph 16, and a decision pursuant to the provisions of paragraph 2 of Article 51, received by the said company (hereinafter referred to as "order, etc." in this paragraph) shall be deemed as a violation committed by the company surviving, or established as a result of, the merger, and an order, etc. received by the company surviving, or established as a result, of the merger, respectively, for the purpose of application of the provisions of the preceding paragraphs.
- (20)
- In the case of the preceding paragraph, matters necessary for the application of the provisions of paragraphs 7 to 9 inclusive shall be provided for by a Cabinet Order.
- (21)
- After three years have passed since the date on which a violation ended, the Fair Trade Commission may not order a payment of a surcharge pertaining to the said violation.
Chapter III Trade Associations
Article 8 (1) No trade association shall engage in any act which falls under any of the following items: - (i)
- Substantially restraining competition in any particular field of trade;
- (ii)
- Entering into an international agreement or an international contract as provided for in Article 6;
(iii) Limiting the present or future number of entrepreneurs in any particular field of business; - (iv)
- Unjustly restricting the functions or activities of the constituent
entrepreneurs (meaning an entrepreneur who is a member of the trade
association; the same shall apply hereinafter);
- (v)
- Inducing entrepreneurs to employ such act as falls under unfair trade
practices.
- (2)
- Every trade association shall, pursuant to the provisions of the Rules of the Fair Trade Commission, within thirty days from the date of its formation, notify the Commission thereof; provided, however, that the trade associations listed in the following items are not so required.
- (i)
- Trade associations established pursuant to the provisions of special Act and provided for by a Cabinet Order as falling under any of the following:
- (a)
- Trade associations that are not at risk of committing an act falling under any of the items in the preceding paragraph in light of the purposes, business, or activities, etc. provided for in the relevant Act;
- (b)
- Trade associations which were founded with the purpose of mutual support among small-scale entrepreneurs or consumers or with the purpose of the wholesome development of them.
- (ii)
- Trade associations which were founded with the purpose of mutual support among small-scale entrepreneurs and provided by a Cabinet Order as those that are at little risk of committing an act falling under any of the items in the preceding paragraph (excluding those listed in the preceding item);
(iii) Clearinghouses designated in the provisions of the Negotiable Instrument Act (Act No. 20 of 1932) or the Check Act (Act No. 57 of 1933).
- (3)
- Trade association (excluding those listed in the items of the preceding paragraph; hereinafter the same in the next paragraph) shall, in case of any change in the matters notified pursuant to the provisions of the preceding paragraph, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Commission thereof, within two months from the end of the business year during which such change occurred.
- (4)
- Trade association shall, in case of dissolution, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Commission thereof, within thirty days from the date of its dissolution.
Article 8-2 (1) In case there exists any act in violation of the provisions of paragraph 1 of the preceding Article, the Fair Trade Commission may, pursuant to the procedures as provided for in Section 2 of Chapter VIII, order the relevant trade association to cease and desist from the said act, to dissolve itself, or to take any other measures necessary to eliminate the said act.
- (2)
- The provisions of paragraph 2 of Article 7 shall apply mutatis mutandis to any act in violation of the provisions of paragraph 1 of the preceding Article.
- (3)
- In the case of ordering a trade association to take measures provided for in paragraph 1 or paragraph 2 of Article 7, as applied mutatis mutandis pursuant to the preceding paragraph, the Fair Trade Commission may, when it finds it
particularly necessary, pursuant to the procedures as provided for in Section 2 of Chapter VIII, also order an officer, manager, or constituent entrepreneur (including the relevant entrepreneur when an officer, employee, agent, or any other person acting for the benefit of an entrepreneur is a constituent entrepreneur; the same shall apply in paragraph 1 of Article 26 and paragraph 2 of Article 59) of the said association to take measures necessary to ensure the measures provided for in paragraph 1 or paragraph 2 of Article 7, as applied mutatis mutandis pursuant to the preceding paragraph.
Article 8-3 The provisions of paragraphs 1, 3 to 5 inclusive, 7 to 13 inclusive, 17, 18 and 21 of Article 7-2 shall apply mutatis mutandis to cases where an act is committed in violation of the provisions of item 1 of paragraph 1 of Article 8 (limited to cases of committing an act which falls under unreasonable restraint of trade) or item 2 thereof (limited to cases of entering into an international agreement or an international contract which contains such matters as fall under unreasonable restraint of trade). In this case, in paragraph 1 of Article 7-2, the term "entrepreneur" shall be deemed to be replaced with "trade association"; and the term "order the said entrepreneur" shall be deemed to be replaced with "order the constituent entrepreneur of the said trade association (including the relevant entrepreneur when an officer, employee, agent, or any other person acting for the benefit of an entrepreneur is a constituent entrepreneur; hereinafter referred to as "specified entrepreneur" in this Article)"; in paragraph 4 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; in paragraph 5 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "had discontinued the relevant violation (limited to cases where the period of implementation pertaining to the violation is less than two years, except for cases that fall under the next paragraph)" shall be deemed to be replaced with "had discontinued the business activities that constituted the relevant violation (limited to cases where the period of implementation of the business activities that constituted the relevant violation is less than two years)"; in paragraph 7 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "entrepreneurs that committed the relevant violation" shall be deemed to be replaced with "specified entrepreneurs of the trade association that committed the relevant violation"; and the term "has not committed" shall be deemed to be replaced with "has not effected the business activities that constituted"; in paragraph 8 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "paragraph 1 or 4 to 6 inclusive" shall be deemed to be replaced with "paragraph 1, 4, or 5"; the term "entrepreneurs that committed the relevant violation" shall be deemed to be replaced with "specified entrepreneurs of the trade association that committed the relevant violation"; and the term "has not committed" shall be deemed to be replaced with "has not effected the business activities that constituted"; in paragraph 9 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "entrepreneur that committed the relevant violation" shall be deemed to be replaced with "specified entrepreneur of the trade association that committed the relevant violation"; and the term "paragraph 1 or 4 to 6 inclusive" shall be deemed to be replaced with "paragraph 1, 4, or 5"; and the term " has not committed" shall be deemed to be replaced with "has not effected the business activities that constituted"; in paragraphs 10 and 11 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; in paragraph 12 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "committed by the relevant entrepreneur" shall be deemed to be replaced with "committed by the relevant trade association"; the term "commit the violation provided for in paragraph 1" shall be deemed to be replaced with "effect the business activities that constituted the relevant violation"; and the term "discontinuing" shall be deemed to be replaced with "discontinuing the business activities that constituted"; in paragraph 13 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; and the term "violation committed" shall be deemed to be replaced with "report submitted pursuant to the provisions of item 1 of the same paragraph"; and in paragraphs 17 and 18 of the said Article, the term "paragraphs 1, 4 to 6 inclusive, 8, 9, and 14" shall be deemed to be replaced with "paragraphs 1, 4, 5, 8, and 9".
Chapter III-2 Monopolistic Situations
Article 8-4 (1) When a monopolistic situation exists, the Fair Trade Commission may order the relevant entrepreneur, pursuant to the procedures provided for in Section 2 of Chapter VIII, to transfer a part of its business or to take any other measures necessary to restore competition with respect to the relevant goods or services; provided, however, that this shall not apply to cases where it is found that such measures may, in relation to the said entrepreneur, reduce the scale of business to such an extent that the expenses required for the supply of goods or services which the said entrepreneur supplies will rise sharply, undermine its financial position, or make it difficult to maintain its international competitiveness, or where such alternative measures may be taken that is found sufficient to restore competition with respect to the relevant goods or services.
(2) In issuing an order pursuant to the preceding paragraph, the Fair Trade Commission shall give consideration, based on the matters listed in the following items, to the smooth operation of business activities by the relevant entrepreneur and entrepreneurs affiliated therewith and the stabilization of life of those employed by the said entrepreneur: - (i)
- Assets, income and expenditures and other aspects of accounting;
- (ii)
- Officers and employees;
(iii) Location and other locational conditions of factories, workplaces, and
offices;
- (iv)
- Facilities and equipment for the business;
- (v)
- The substance of patent rights, trademark rights, and other intellectual
property rights and other technological features;
- (vi)
- Capacity for and situations of production and sales, etc.;
(vii) Capacity for and situations of funding and procurement;
(viii) Situations of supply and distribution of goods or services.
Chapter IV Stockholdings, Interlocking Directors, Mergers, Demergers, and Acquisitions of Business
Article 9 (1) Any corporation, which may be to cause excessive concentration of economic power through holding of the stocks (including shares held by a member; the same shall apply hereinafter) of other corporations in Japan, shall not be established. - (2)
- A corporation (including a foreign corporation; the same shall apply hereinafter) shall not become a corporation which may be to cause excessive concentration of economic power in Japan through acquisition or holding of the stocks of other corporations in Japan.
- (3)
- The term "excessive concentration of economic power" in the preceding two paragraphs means a situation in which the extreme largeness of comprehensive business scale over a considerable number of fields of business of a corporation and its subsidiaries and other corporations in Japan whose business activities are controlled by the said corporation through holding of their stocks, the remarkably strong power of the said corporations to influence other entrepreneurs due to transactions pertaining to the funds of, or the occupancy of influential positions over a considerable number of interrelated fields of business by the said corporations, has a large effect on the national economy and impedes the promotion of fair and free competition.
- (4)
- Any other corporation in Japan of which majority of voting rights of all stockholders is held by a corporation and any one or more of its subsidiaries, or by any one or more subsidiaries of a corporation, shall be deemed as a subsidiary of the said corporation, for the purpose of application of the provisions of this Article.
- (5)
- Any corporation falling under any of the descriptions listed in the following items, when the sum of the total assets (meaning the amount of total assets calculated pursuant to the method provided for in the Rules of the Fair Trade Commission; hereinafter the same shall apply in this paragraph) of the corporation and its subsidiaries (limited to total assets of corporations in Japan), as aggregated pursuant to the method provided for in the Rules of the Fair Trade Commission, exceeds the amount provided for in a Cabinet Order, which shall be not less than the amount listed in the relevant item, shall submit, pursuant to the provisions of the Rules of the Fair Trade Commission, a written report on the business of the said corporation and its subsidiaries to the Fair Trade Commission within three months from the end of each business year; provided, however, that this shall not apply if the said corporation is a subsidiary of another corporation.
- (i)
- A corporation whose ratio of the total acquisition value (or other value if it is so listed in the latest balance sheet) of the stocks of subsidiaries to the total assets of the said corporation exceeds fifty percent (referred to as "holding company" in the next item): Six hundred billion yen
- (ii)
- A corporation that is engaged in banking, insurance, or securities
businesses (excluding holding companies): Eight trillion yen
(iii) A corporation other than those listed in the preceding two items: Two
trillion yen
- (6)
- A newly incorporated corporation that falls under the case provided for in the preceding paragraph shall, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Commission thereof within thirty days from the date of its incorporation.
Article 10 (1) No corporation shall acquire or hold stocks of any other corporations where the effect of such acquisition or holding of stocks may be substantially to restrain competition in any particular field of trade, or shall acquire or hold stocks of other corporations through unfair trade practices.
- (2)
- Every corporation whose total assets (meaning the amount of total assets appearing in the latest balance sheet; the same shall apply hereinafter) exceed the amount provided for in a Cabinet Order, which shall not be less than two billion yen, and whose total assets, coupled with total assets of subsidiaries of the said corporation, and a corporation in Japan which holds majority of voting rights of all stockholders of the said corporation (hereinafter referred to as "sum of the total assets"), exceed the amount provided for in a Cabinet Order, which shall not be less than ten billion yen (hereinafter referred to as "stockholding corporation" in this Article), in case that it acquires or holds the stocks (including the stocks held in monetary or security trust, where the stockholding corporation is a settlor or beneficiary and may exercise the voting
rights or give instructions to the trustee regarding the exercise of such voting rights) of another corporation in Japan whose total assets exceed the amount provided for in a Cabinet Order, which shall not be less than one billion yen (hereinafter referred to as "issuing corporation" in this Article), so that the ratio of voting rights pertaining to the stocks acquired or held by the stockholding corporation to voting rights of all stockholders of the issuing corporation is to exceed the percentage figure provided for in a Cabinet Order, which shall not be less than ten percent (in the case that more than one percentage figures are provided for, any of such percentage figures pursuant to the provisions of such Cabinet Order), shall submit, pursuant to the provisions of the Rules of the Fair Trade Commission, a written report on such stocks to the Fair Trade Commission within thirty days from the date of the relevant exceeding; provided, however, that this shall not apply to cases where the all the issued stocks of issuing corporation is acquired simultaneously with the incorporation, cases where a corporation engaged in banking or insurance business (excluding certain corporations engaged in insurance business as provided for in the Rules of the Fair Trade Commission; the same shall apply in paragraphs 1 and 2 of the next Article) acquires or holds stocks of other corporations in Japan (excluding those engaged in banking or insurance business and those as otherwise provided for in the Rules of the Fair Trade Commission; the same shall apply in paragraphs 1 and 2 of the next Article), or cases where a corporation engaged in securities business (excluding securities brokers) acquires or holds stocks in the course of its business.
- (3)
- The provisions of the preceding paragraph shall apply mutatis mutandis to cases where the stockholding corporation acquires or holds the stocks of a foreign corporation whose net sales appearing in the profit and loss statement prepared simultaneously with the latest balance sheet of its business offices (including the business offices of subsidiaries of the relevant foreign corporation) in Japan (hereinafter referred to as "domestic sales") exceed the amount provided for in a Cabinet Order, which shall not be less than one billion yen.
Article 11 (1) No corporation engaged in banking or insurance business shall acquire or hold voting rights in another corporation in Japan if it results in its holding in excess of five percent (ten percent in the case of a corporation engaged in insurance business; the same shall apply in the next paragraph) of voting rights of all stockholders; provided, however, that this shall not apply to cases where approval of the Fair Trade Commission is obtained in advance pursuant to the provisions of the Rules of the Fair Trade Commission, or to cases falling under any of the following items: - (i)
- Cases where voting rights are acquired or held by acquisition or holding of
stocks as a result of the exercise of a security interest, or of receipt of
substitute performance;
- (ii)
- Cases where the ratio of the voting rights pertaining to the stocks already held to voting rights of all stockholders of the said corporation increases, as a result of acquisition by another corporation in Japan of its own stocks;
(iii) Cases where voting rights are acquired or held by acquisition or holding of the stocks in the form of trust property pertaining to monetary or security trust; - (iv)
- Cases where voting rights are acquired or held by a limited liability partner in an investment limited partnership (hereinafter referred to as "limited liability partner" in this item) as a result of acquisition or holding of stocks as partnership property; provided, however, that this shall not apply to cases where the limited liability partner may exercise the voting rights, cases where the limited liability partner may give instructions to an unlimited liability partner in the investment limited partnership regarding the exercise of such voting rights, and cases where the said voting rights are held in excess of the period provided for in a Cabinet Order from the date when the said voting rights were acquired;
- (v)
- Cases where voting rights are acquired or held by a partner in a partnership that was established by a partnership contract provided for in paragraph 1 of Article 667 of the Civil Code (Act No. 89 of 1896) whose purpose is operation of business to make investments into corporations (limited to partnerships where management of business is delegated with one or more partners) (excluding the partners delegated with the management of business; hereinafter referred to as "non-managing partner" in this item) as a result of acquisition or holding of stocks as partnership property; provided, however, that this shall not apply to cases where the non-managing partner may exercise the voting rights, cases where the non-managing partner may give instructions to a partner delegated with the management of business regarding the exercise of such voting rights, and cases where the said voting rights are held in excess of the period provided for in the Cabinet Order referred to in the preceding item from the date when the said voting rights were acquired; or
- (vi)
- In addition to the cases listed in the preceding items, cases provided for in the Rules of the Fair Trade Commission as cases where there is no danger of restriction on the business activities of another corporation in Japan.
- (2)
- Any corporation, in the cases of items 1 to 3 inclusive and 6 of the preceding paragraph (in the case of item 3 of the same paragraph, excluding cases where the settlor or the beneficiary may exercise the relevant voting rights and the settlor or beneficiary may instruct the trustee on the exercise of such voting rights), that attempts to hold the relevant voting rights of another corporation
in Japan over a period of one year from the date of such acquisition resulting in holding in excess of five percent of total voting rights of all stockholders shall, pursuant to the provisions of the Rules of the Fair Trade Commission, obtain approval in advance from the Commission. The approval of the Fair Trade Commission in such cases shall, except for the case of item 3 of the same paragraph, be granted on the condition that the corporation engaged in banking or insurance business promptly dispose of the relevant voting rights.
- (3)
- When the Fair Trade Commission intends to grant approval under the provisions of the preceding two paragraphs, it shall, in advance, consult with the Prime Minister.
- (4)
- The authority of the Prime Minister set forth in the preceding paragraph shall be delegated to the Commissioner of the Financial Services Agency.
Article 12 Deleted.
Article 13 (1) Neither an director nor an employee (meaning in this Article a person other than directors engaged in the business of a corporation on a regular basis) of a corporation shall hold at the same time a position as an director of another corporation where the effect of such an interlocking directorate may be substantially to restrain competition in any particular field of trade.
(2) No corporation shall coerce another corporation in competition with it in Japan through unfair trade practices, to admit its directors concurrently to the position of director or employee of the latter corporation, or to admit its employee concurrently to the position of director of the latter corporation.
Article 14 No person other than corporations shall acquire or hold stocks of a corporation where the effect of such acquisition or holding of stocks may be substantially to restrain competition in any particular field of trade, or shall acquire or hold stocks of a corporation through unfair trade practices.
Article 15 (1) No corporation shall effect a merger if any of the following items applies: - (i)
- Where the effect of the merger may be substantially to restrain competition in a particular field of trade;
- (ii)
- Where unfair trade practices have been employed in the course of the
merger.
(2) Every corporation in Japan which intends to become a party to a merger (hereinafter in this Article "merging corporation") shall, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Fair Trade Commission in advance of their plan with regard to such merger, in case that the sum of the total assets of one corporation exceeds the amount, provided for in a Cabinet Order, which shall not be less than ten billion yen, and the sum of the total assets of another merging corporation exceeds the amount, provided for in a Cabinet Order, which shall not be less than one billion yen; provided, however, that this shall not apply to such cases falling under any of the following items: - (i)
- Any one of the merging corporations holds a majority of the voting rights of all stockholders of every other merging corporation;
- (ii)
- The majority of the voting rights of all stockholders of each of the merging corporations is held by one and the same corporation.
- (3)
- The provisions of the preceding paragraph shall apply mutatis mutandis to any foreign corporation that intends to become a party to a merger. In this case, the term "sum of the total assets" in the same paragraph shall be deemed to be replaced with "domestic sales".
- (4)
- No corporation which has notified pursuant to the provisions of paragraph 2 (including the cases where it is applied mutatis mutandis pursuant to the preceding paragraph after deemed replacement) shall effect a merger until the expiration of the thirty-day waiting period from the date of acceptance of the said notification; provided, however, that the Fair Trade Commission may, when it finds it necessary, shorten the said period.
- (5)
- The Fair Trade Commission shall, where it intends to order necessary measures regarding the relevant merger pursuant to the provisions of paragraph 1 of Article 17-2, notify the merging corporations pursuant to the provisions of paragraph 5 of Article 49 before the expiration of the thirty-day waiting period provided for in the main clause of the preceding paragraph, or of any shortened period pursuant to the provisions of the proviso thereof (in case that the Fair Trade Commission requested at least one corporation among the merging corporations to submit necessary reports, information, or materials (hereinafter in this paragraph "Reports, etc.") pursuant to the provisions of the Rules of the Fair Trade Commission during the relevant period, the period up to the date on which one hundred-twenty days from the date of acceptance of the notification stipulated in the preceding paragraph have passed, or the date on which ninety days from the date of acceptance of all the Reports, etc. have passed, whichever is later); provided, however, that the this shall not apply to such cases falling under any of the following items:
- (i)
- Matters considered important in light of the provisions of paragraph 1 are not carried out by the deadline stipulated in the plan regarding the merger notified pursuant to the provisions of paragraph 2 (including the cases where it is applied mutatis mutandis pursuant to paragraph 3 after deemed replacement; the same shall apply in the following item);
- (ii)
- There has been a false statement with respect to important matters in the
plan regarding the merger notified pursuant to the provisions of paragraph 2.
(6) In cases falling under the provisions of item 1 of the preceding paragraph, the Fair Trade Commission shall send a notification under the main clause of the preceding paragraph within one year from the deadline in the same item if it intends to order necessary measures relating to the relevant merger pursuant to the provisions of paragraph 1 of Article 17-2.
Article 15-2 (1) No corporation shall effect a joint incorporation-type demerger (meaning an incorporation-type demerger that a corporation effects jointly with another corporation; the same shall apply hereinafter) or an absorption-type demerger if any of the following items applies: - (i)
- The effect of the joint incorporation-type demerger or absorption-type demerger may be substantially to restrain competition in a particular field of trade;
- (ii)
- Unfair trade practices have been employed in the course of the joint
incorporation-type demerger or absorption-type demerger.
- (2)
- Every corporation in Japan which intends to become a party to a joint incorporation-type demerger shall, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Fair Trade Commission in advance of their plan with regard to such joint incorporation-type demerger if any of the following items applies:
- (i)
- The sum of the total assets of any of the corporations which intends to become a party to the joint incorporation-type demerger (limited to a corporation that intends to have the corporation incorporated through such joint incorporation-type demerger acquire all of its business (hereinafter in this paragraph "total succession corporation")) exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen, and the sum of the total assets of another corporation which intends to become a party to the same demerger (limited to a total succession corporation) exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen;
- (ii)
- The sum of the total assets of any of the corporations which intends to become a party to the joint incorporation-type demerger (limited to a total succession corporation) exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen, and the net sales recognized in the profit and loss statement which is made together with the latest balance sheet of another corporation which intends to become a party to the same demerger (limited to a corporation that intends to have the corporation incorporated through such joint incorporation-type demerger acquire a substantial part of its business (hereinafter in this paragraph "substantial part succession corporation")), in connection with the part of the business to be succeeded to, exceeds the amount stipulated by a Cabinet Order, which is
not less than one billion yen; (iii) The sum of the total assets of any of the corporations which intends to become a party to the joint incorporation-type demerger (limited to a total succession corporation) exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen, and the net sales recognized in the profit and loss statement which is made together with the latest balance sheet of another corporation which intends to become a party to the same demerger (limited to a substantial part succession corporation), in connection with the part of the business to be succeeded to, exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen (excluding cases that fall under the previous item); (iv) The net sales recognized in the profit and loss statement which is made together with the latest balance sheet of any of the corporations which intends to become a party to the joint incorporation-type demerger (limited to a substantial part succession corporation), in connection with the part of the business to be succeeded to, exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen, and the net sales recognized in the profit and loss statement which is made together with the latest balance sheet of another corporation which intends to become a party to the same demerger (limited to a substantial part succession corporation), in connection with the part of the business to be succeeded to, exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen.
- (3)
- Every corporation in Japan which intends to become a party to an absorption-type demerger shall, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Fair Trade Commission in advance of their plan with regard to such absorption-type demerger if any of the following items applies:
- (i)
- The sum of the total assets of any of the corporations which intends to become a party to the absorption-type demerger (limited to a corporation that intends to alienate all of its business through such absorption-type demerger (referred to in the following item as "total succession corporation")) exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen, and the sum of the total assets of the corporation which intends to succeed to the business through such demerger exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen;
- (ii)
- The sum of the total assets of any of the corporations which intends to become a party to the absorption-type demerger (limited to a total succession corporation) exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen, and the sum of the total assets of the corporation which intends to succeed to the business through such demerger exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen (excluding cases that fall under the previous item);
(iii) The net sales recognized in the profit and loss statement which is made together with the latest balance sheet of any of the corporations which intends to become a party to the absorption-type demerger (limited to a corporation that intends to alienate a substantial part of its business through such absorption-type demerger (referred to in the following item as "substantial part succession corporation")), in connection with the part of the business to be alienated, exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen, and the sum of the total assets of the corporation which intends to succeed to the business through such demerger exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen; (iv) The net sales recognized in the profit and loss statement which is made together with the latest balance sheet of any of the corporations which intends to become a party to the absorption-type demerger (limited to a substantial part succession corporation), in connection with the part of the business to be alienated, exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen, and the sum of the total assets of the corporation which intends to succeed to the business through such demerger exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen (excluding cases that fall under the previous item).
- (4)
- The provisions of the preceding two paragraphs shall not apply to such cases falling under any of the following items:
- (i)
- Any of the corporations which intends to become a party to a joint incorporation-type demerger or an absorption-type demerger holds a majority of the voting rights of all stockholders of every other corporation that intends to become a party to the same demerger;
- (ii)
- The majority of the voting rights of all stockholders of each and every
corporation which intends to become a party to a joint incorporation-type
demerger or an absorption-type demerger is held by one and the same
corporation.
- (5)
- The provisions of the preceding three paragraphs shall apply mutatis mutandis to any foreign corporation which intends to become a party to a joint incorporation-type demerger or an absorption-type demerger. In this case, the terms "sum of total assets" and "net sales recognized in the profit and loss statement which is made together with the latest balance sheet" in paragraphs 2 and 3 shall be deemed to be replaced with "domestic sales".
- (6)
- The provisions of paragraphs 4 to 6 inclusive of the preceding Article shall apply mutatis mutandis to the restriction of joint incorporation-type demergers and absorption-type demergers pertaining to the notification under paragraphs 2 and 3 (including the cases where they are applied mutatis mutandis pursuant to the preceding paragraph after deemed replacement) and to the
orders made by the Fair Trade Commission pursuant to the provisions of paragraph 1 of Article 17-2. In this case, the term "merger" in paragraphs 4 and 6 of the preceding Article shall be deemed to be replaced with "joint incorporation-type demerger or absorption-type demerger"; the term "regarding the merger" appearing in paragraph 5 of the preceding Article shall be deemed to be replaced with "regarding the joint incorporation-type demerger or absorption-type demerger"; and the term "merging corporations" therein shall be deemed to be replaced with "corporations which intend to become parties to a joint incorporation-type demerger or an absorption-type demerger".
Article 16 (1) No corporation shall perform an act falling under any of the following acts, where the effect of such act may be substantially to restrain competition in any particular field of trade, or through unfair trade practices: - (i)
- Acquiring the whole or a substantial part of the business of another
corporation;
- (ii)
- Acquiring the whole or a substantial part of the fixed assets used for the business of another corporation;
(iii) Taking on a lease of the whole or a substantial part of the business of
another corporation;
- (iv)
- Undertaking the management of the whole or a substantial part of the
business of another corporation;
- (v)
- Entering into a contract which provides for a joint profit and loss account for business with another corporation.
- (2)
- Any corporation whose sum of the total assets exceeds the amount provided for by a Cabinet Order, which is not less than ten billion yen (referred to in paragraph 4 as "acquiring corporation") shall pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Fair Trade Commission in advance of its plan with regard to the acquisition of the business or the fixed assets used for the business (hereinafter in this Article "business, etc.") if any of the following items applies.
- (i)
- The corporation intends to acquire the whole business of another corporation in Japan whose total assets exceed the amount provided for by a Cabinet Order, which is not less than one billion yen;
- (ii)
- The corporation intends to acquire a substantial part of the business or the whole or a substantial part of the fixed assets used for the business of another corporation in Japan, and the net sales recognized in the profit and loss statement which is made together with the latest balance sheet in connection with the subject of such acquisition exceeds the amount provided for by a Cabinet Order, which is not less than one billion yen.
- (3)
- The provisions of the preceding paragraph shall not apply if any of the following items applies:
- (i)
- Any of the corporations which intends to acquire the business, etc. or
transfer the said business, etc. holds a majority of the voting rights of all
stockholders of every other corporation involved;
- (ii)
- The majority of the voting rights of all stockholders of each of the corporations which intends to acquire the business, etc. and transfer the said business, etc. is held by one and the same corporation.
- (4)
- The provisions of the preceding two paragraphs shall apply mutatis mutandis to the cases where an acquiring corporation intends to acquire the business, etc. of other foreign corporations. In this case, the term "total assets" in item 1 of paragraph 2 and the term "net sales recognized in the profit and loss statement which is made together with the latest balance sheet" in item 2 of paragraph 2 shall be deemed to be replaced with "domestic sales".
- (5)
- The provisions of paragraphs 4 to 6 inclusive of Article 15 shall apply mutatis mutandis to the restriction of acquisition of business, etc. pertaining to the notification under paragraph 2 (including the cases where it is applied mutatis mutandis pursuant to the preceding paragraph after deemed replacement) and the orders made by the Fair Trade Commission pursuant to the provisions of paragraph 1 of Article 17-2. In this case, the term "merger" in paragraphs 4 and 6 of Article 15 shall be deemed to be replaced with "acquisition of the business or the fixed assets used for the business"; the term "regarding the merger" in paragraph 5 of Article 15 shall be deemed to be replaced with "regarding the acquisition of the business or the fixed assets used for the business"; and the terms "at least one corporation among the merging corporations" and "the merging corporations" therein shall be deemed to be replaced with "the corporations that intend to acquire the business or the fixed assets used for the business".
Article 17 No acts in whatever form or manner shall be committed which evade such prohibitions or restrictions as provided for in the provisions of Articles 9 to 16 inclusive.
Article 17-2 (1) Where there exists any act in violation of the provisions of paragraph 1 of Article 10, paragraph 1 of Article 11, paragraph 1 of Article 15, paragraph 1 of Article 15-2, paragraph 1 of Article 16, or the preceding Article, the Fair Trade Commission may, pursuant to the procedures prescribed in Section 2 of Chapter VIII, order the entrepreneur concerned to dispose of all or some of its stocks, to transfer a part of its business, or to take any other measures necessary to eliminate such acts in violation of the said provisions.
(2) Where there exists any act in violation of the provisions of paragraph 1 or 2 of Article 9, Article 13, Article 14, or the preceding Article, the Fair Trade Commission may, pursuant to the procedures prescribed in Section 2 of Chapter VIII, order the person violating such provisions to dispose of all or some of his or her stocks, to resign from his or her position as an officer of the corporation, or to take any other measures necessary to eliminate such acts in violation of the said provisions.
Article 18 (1) The Fair Trade Commission may, in cases where corporations have merged in violation of the provisions of paragraph 2 of Article 15 (including the cases where it is applied mutatis mutandis pursuant to paragraph 3 of Article 15 after deemed replacement) and paragraph 4 of Article 15, bring a lawsuit to have the said merger declared invalid.
(2) The provisions of the preceding paragraph shall apply mutatis mutandis to the cases where corporations have effected a joint incorporation-type demerger or an absorption-type demerger in violation of the provisions of paragraphs 2 and 3 of Article 15-2 (including the cases where they are applied mutatis mutandis pursuant to paragraph 5 of Article 15-2) and paragraph 4 of Article 15, which is applied mutatis mutandis pursuant to paragraph 6 of Article 15-2. In this case, the term "the said merger" in the preceding paragraph shall be deemed to be replaced with "the said joint incorporation-type demerger or the said absorption-type demerger".
Chapter V Unfair Trade Practices
Article 19 No entrepreneur shall employ unfair trade practices.
Article 20 (1) Where there exists any act in violation of the provisions of the preceding Article, the Fair Trade Commission may, pursuant to the procedures prescribed in Section 2 of Chapter VIII, order the ceasing and desisting from the said act, the deleting of the relevant clauses from the contract, or any other measures necessary to eliminate the said act.
(2) The provisions of paragraph 2 of Article 7 shall apply mutatis mutandis to an act in violation of the provisions of the preceding Article.
Chapter VI Exemptions
Article 21 The provisions of this Act shall not apply to such acts recognizable as the exercise of rights under the Copyright Act, the Patent Act, the Utility Model Act, the Design Act, or the Trademark Act.
Article 22 The provisions of this Act shall not apply to such acts of a partnership (including a federation of partnerships) which conforms to the requirements stipulated in each of the following items and which has been formed pursuant to the provisions of law; provided, however, that this shall not apply to the cases where unfair trade practices are employed, or where competition in any particular field of trade is substantially restrained, resulting in unjust increases of prices: - (i)
- The purpose of the partnership is mutual support among small-scale
entrepreneurs or consumers;
- (ii)
- The partnership is voluntarily formed; and the partners may voluntarily participate in and withdraw from the partnership;
(iii) Each partner possesses equal voting rights; and
(iv) If distribution of profits among partners is contemplated, the limits of the distributions are stipulated by laws and regulations or in the articles of partnership.
Article 23 (1) The provisions of this Act shall not apply to legitimate acts performed by an entrepreneur who produces or sells a commodity, which is designated by the Fair Trade Commission and the uniform quality of which is easily identifiable,, in order to fix and maintain the resale price thereof with another entrepreneur who purchases such commodity (this term "resale price" means the price at which the latter entrepreneur or an entrepreneur who purchases such commodity from the latter entrepreneur for sales sells it; the same shall apply hereinafter); provided, however, that this shall not apply to the cases where the said act tends to unreasonably harm the interests of general consumers, or where it is done by an entrepreneur who sells the said commodity against the will of the entrepreneur who produces the said commodity. - (2)
- The Fair Trade Commission shall not designate a commodity under the provisions of the preceding paragraph unless each of the following items applies:
- (i)
- The commodity is for daily use by general consumers; and
- (ii)
- Free competition exists with respect to the commodity.
- (3)
- The designation of a commodity under the provisions of paragraph 1 shall be made by a notice.
- (4)
- The same as is prescribed in paragraph 1 shall apply to legitimate acts performed by an entrepreneur who publishes works or an entrepreneur who sells such published works in order to fix and maintain the resale price thereof with another entrepreneur who purchases such works.
- (5)
- Organizations formed pursuant to the provisions of any of the following Acts shall not be included in another entrepreneur who purchases commodities or works prescribed in paragraph 1 or the preceding paragraph; provided, however, that this shall, in the case of organizations formed pursuant to the provisions of any of the Acts mentioned in items (viii) and (viii)-2, only apply to
the cases where a business cooperative, a minor business cooperative, a federation of cooperatives, a commercial and industrial partnership, or a federation of commercial and industrial partnerships purchases such commodities as prescribed in paragraph 2 or such works as prescribed in paragraph 4, for the consumption of persons directly or indirectly constituting the said business cooperative, federation of cooperatives, commercial and industrial partnerships, or a federation of commercial and industrial partnerships: - (i)
- National Public Officer Act;
- (ii)
- Agricultural Co-operatives Act;
(iii) Act on Mutual Aid Association for National Public Officers;
(iii)-2 Act on Mutual Aid Association for Local Public Officers, etc.;
- (iv)
- Consumer Cooperatives Act;
- (v)
- Fisheries Cooperatives Act;
- (vi)
- Act on Labor Relations of Specified Independent Administrative Institution, etc.;
(vii) Labor Union Act;
(viii) Small and Medium-Sized Enterprise Cooperatives Act;
(viii)-2 Act on Organizations of Small and Medium Sized Enterprises;
- (ix)
- Local Public Officer Act;
- (x)
- Forestry Partnership Act;
- (xi)
- Act on Labor Relations of Local Public Enterprises.
(6) When an entrepreneur as prescribed in paragraph 1 has entered into a contract which fixes and maintains the resale price as prescribed in the said paragraph, the entrepreneur shall, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Fair Trade Commission thereof within thirty days from the date of the contract; provided, however, that this shall not apply if the Rules of the Fair Trade Commission stipulates otherwise.
Chapter VII Injunctions and Damages
Article 24 A person whose interests are infringed or likely to be infringed by an act in violation of the provisions of item 5 of paragraph 1 of Article 8 or Article 19 and who is thereby suffering or likely to suffer extreme damages is entitled to seek the suspension or prevention of such infringements from an entrepreneur or a trade association that infringes or is likely to infringe such interests.
Article 25 (1) Any entrepreneur that has committed an act in violation of the provisions of Articles 3, 6, or 19 (in the case of entrepreneurs who have committed acts in violation of the provisions of Article 6, limited to those entrepreneurs who have effected unreasonable restraint of trade or employed unfair trade practices in the international agreement or contract concerned) and any trade association that has committed an act in violation of the provisions of paragraph 1 of Article 8 shall be liable for damages suffered by another party. - (2)
- No entrepreneur or trade association may be exempted from the liability prescribed in the preceding paragraph by proving the non-existence of intention or negligence on its part.
Article 26 (1) The right to claim for damages pursuant to the provisions of the preceding Article may not be alleged in court until the cease and desist order prescribed in the provisions of paragraph 1 of Article 49 (in the case that no such order is issued, the payment order prescribed in paragraph 1 of Article 50 (excluding those issued against an entrepreneur that constitutes a trade association that has committed an act in violation of the provisions of item 1 or 2 of paragraph 1 of Article 8)) or the decision set forth in the provisions of paragraph 4 of Article 66 has become final and binding.
- (2)
- The right set forth in the preceding paragraph shall become extinct by prescription after a lapse of three years from the date on which the cease and desist order or the payment order or the decision set forth in the said paragraph became final and binding.
Chapter VIII Fair Trade Commission Section 1 Establishment, Duty, Affairs under the Jurisdiction and Organization, etc.
Article 27 (1) The Fair Trade Commission shall, pursuant to the provisions of paragraph 3 of Article 49 of the Act for Establishment of the Cabinet Office (Act No. 89 of 1999), be established, whose duty shall be to achieve the purposes set forth in Article 1.
(2) The Fair Trade Commission shall be administratively attached to the office of the Prime Minister.
Article 27-2 In order to perform the duty set forth in paragraph 1 of the preceding Article, the Fair Trade Commission shall take charge of the following affairs: - (i)
- Matters relating to regulation on private monopolization;
- (ii)
- Matters relating to regulation on unreasonable restraint of trade;
(iii) Matters relating to regulation on unfair trade practices; - (iv)
- Matters relating to regulation pertaining to monopolistic situations;
- (v)
- Matters relating to international cooperation pertaining to affairs under the
jurisdiction of the Fair Trade Commission;
- (vi)
- Affairs which are assigned to the Fair Trade Commission pursuant to an Act (including an order pursuant to an Act), in addition to what is listed in any of the preceding items.
Article 28 The chairman and the commissioners of the Fair Trade Commission shall perform their authority independently.
Article 29 (1) The Fair Trade Commission shall consist of a chairman and four commissioners. - (2)
- The chairman and the commissioners shall be appointed by the Prime Minister with the consent of both Houses of the Diet from among persons whose age is thirty-five or more and who have knowledge and experience in law or economics.
- (3)
- The appointment or dismissal of the chairman shall be certified by the Emperor.
- (4)
- The chairman and the commissioners shall be public officials.
Article 30 (1) The term of office of the chairman and the commissioners shall be five years: however, the term of office of the chairman and the commissioners appointed to fill a vacancy shall be the remaining term of office of his or her predecessor.
- (2)
- The chairman and the commissioners may be reappointed.
- (3)
- The chairman and the commissioners shall retire from the office upon reaching the age of seventy.
- (4)
- If the term of office of the chairman or the commissioners expires, or a vacancy therefor occurs at the time when the consent of both Houses of the Diet is unobtainable because the Diet is not in session or the House of Representatives is dissolved, the Prime Minister may appoint the chairman or a commissioner from among persons who have such qualifications as prescribed in paragraph 2 of the preceding Article. In this case, the subsequent approval of both Houses of the Diet shall be obtained in the first session of the Diet after the appointment.
Article 31 The chairman or a commissioner may not, against his or her will, be dismissed from office while he or she is in office, except in cases falling under any of the following items: - (i)
- Where a decision of the commencement of bankruptcy proceedings has been made against him or her;
- (ii)
- Where he or she has been dismissed by disciplinary action;
(iii) Where he or she has been punished for violation of the provisions of this Act; - (iv)
- Where he or she has been punished by imprisonment or severer
punishment;
- (v)
- Where the Fair Trade Commission has decided that he or she is incapable of executing his or her duties due to mental or physical disorder;
- (vi)
- Where the subsequent approval of both Houses of the Diet could not be
obtained in the case referred to in paragraph 4 of the preceding Article.
Article 32 In the case referred to in items (i) or (iii) to (vi) inclusive of the preceding Article, the Prime Minister shall dismiss the chairman or the commissioner concerned from office.
Article 33 (1) The chairman shall preside over the affairs of the Fair Trade Commission and shall represent it. - (2)
- The Fair Trade Commission shall choose in advance a commissioner from among the commissioners to act as the representative of the chairman in the case where he or she cannot execute the chairman's duties.
Article 34 (1) Meetings of the Fair Trade Commission shall not be declared open, and a resolution shall not be made without the attendance of the chairman and two or more commissioners.
- (2)
- All decisions of the Fair Trade Commission shall be made by a majority of the attendees. In the case that the votes are evenly divided, the chairman shall have the power to decide the vote.
- (3)
- The decision of the Fair Trade Commission under the provisions of item 5 of Article 31 shall, notwithstanding the provisions of the preceding paragraph, be made with the unanimous concurrence of all commissioners and the chairman except for the commissioner or chairman concerned.
- (4)
- For the purpose of applying the provisions of paragraph 1 in the case that the chairman cannot execute the chairman's duties, the commissioner chosen to act as the representative of the chairman pursuant to the provisions of paragraph 2 of the preceding Article shall be deemed to be the chairman.
Article 35 (1) A general secretariat shall be established at the Fair Trade Commission for the administration of its affairs.
- (2)
- The general secretariat shall have a secretary general.
- (3)
- The secretary general shall preside over the affairs of the general secretariat (excluding those affairs which the Fair Trade Commission decides, pursuant to the provisions of paragraph 1 of Article 56, to designate hearing examiners and cause them to conduct).
- (4)
- The secretariat and bureaus shall be established at the general secretariat.
- (5)
- The provisions of paragraphs 2 to 8 inclusive of Article 17 of the Act for Establishment of the Cabinet Office shall apply mutatis mutandis to the establishment, the scope of the affairs under the jurisdiction, and the internal organization of the secretariat and bureaus referred to in the preceding paragraph.
- (6)
- The secretariat and bureaus established pursuant to the provisions of paragraph 4 shall not exceed three in number.
- (7)
- Hearing examiners shall be posted at the general secretariat to conduct all or part of the hearing procedures (excluding the rendering of a decision).
- (8)
- The number of hearing examiners shall be stipulated by a Cabinet Order.
- (9)
- Hearing examiners shall be selected by the Fair Trade Commission from among the staff members of the general secretariat who have been found to have the knowledge and experience in law and economics necessary to conduct the hearing procedures and to be capable of making a fair judgment.
- (10)
- A public prosecutor, an attorney practicing at the time of the appointment or a person qualified to be an attorney shall be among the staff members of the general secretariat.
- (11)
- The duties of the staff member who is the public prosecutor referred to in the preceding paragraph shall be limited to matters relating to cases in violation of the provisions of this Act.
Article 35-2 (1) Local offices shall be established at necessary locations as local organizations of the general secretariat of the Fair Trade Commission.
- (2)
- The names, locations and territorial jurisdictions of the local offices referred to in the preceding paragraph shall be provided for by a Cabinet Order.
- (3)
- Branches may be established at necessary locations under the local offices referred to in paragraph 1 to conduct some of the affairs of the local offices.
- (4)
- The names, locations and territorial jurisdictions of the branches referred to in the preceding paragraph shall be provided for by the Cabinet Office Ordinance.
Article 36 (1) The remuneration of the chairman and the commissioners shall be provided for separately.
- (2)
- The remuneration of the chairman and the commissioners may not, against his or her will, be reduced in amount while he or she is in office.
Article 37 The chairman, the commissioners and such staff members of the Fair Trade Commission as may be stipulated by a Cabinet Order may not engage in any of the following acts while he or she is in office: - (i)
- Becoming a member of the Diet or of the legislative assembly of a local
public entity, or actively engaging in political activities;
- (ii)
- Holding any other remunerative positions except as permitted by the Prime Minister; or
(iii) Engaging in commerce or any other business for pecuniary gain.
Article 38 The chairman, the commissioners and the staff members of the Fair Trade Commission shall not express their opinions outside the Fair Trade Commission on the existence or non-existence of facts or the application of laws and regulations with regard to a case: however, this shall not apply to the cases prescribed in this Act or the cases where the results of his or her research on this Act are published.
Article 39 The chairman, the commissioners and the staff members of the Fair Trade Commission, or any person who once held such position shall not divulge to others or make surreptitious use of the secrets of entrepreneurs which came to his or her knowledge in the course of his or her duties.
Article 40 The Fair Trade Commission may, if necessary for the performance of its duties, order public offices, juridical persons formed by special laws and regulations, entrepreneurs or organizations of entrepreneurs, or their personnel to appear before the Fair Trade Commission, or require them to submit necessary reports, information or materials.
Table of contents Chapter I General Provisions (Articles 1 and 2) Chapter II Private Monopolization and Unreasonable Restraint of Trade
(Articles 3 to 7-2 inclusive) Chapter III Trade Associations (Articles 8 to 8-3 inclusive) Chapter III-2 Monopolistic Situations (Article 8-4) Chapter IV Stockholdings, Interlocking Directors, Mergers, Demergers, and
Acquisitions of Business (Articles 9 to 18 inclusive) Section 1 Establishment, Duty, Affairs under the Jurisdiction and
Organization, etc. (Articles 27 to 44 inclusive) Chapter IX Lawsuits (Articles 77 to 88 inclusive) 118 inclusive) Chapter I General Provisions
Article 1 The purpose of this Act is, by prohibiting private monopolization, unreasonable restraint of trade and unfair trade practices, by preventing excessive concentration of economic power and by eliminating unreasonable restraint of production, sale, price, technology, etc., and all other unjust restriction on business activities through combinations, agreements, etc., to promote fair and free competition, to stimulate the creative initiative of entrepreneurs, to encourage business activities, to heighten the level of employment and actual national income, and thereby to promote the democratic and wholesome development of the national economy as well as to assure the interests of general consumers.
Article 2 (1) The term "entrepreneur" as used in this Act means a person, who operates a commercial, industrial, financial or any other business. Any officer, employee, agent, or any other person who acts for the benefit of any entrepreneur shall be deemed to be an entrepreneur with regard to the application of the provisions of the following paragraph and of Chapter III. Chapter II Private Monopolization and Unreasonable Restraint of Trade
Article 3 No entrepreneur shall effect private monopolization or unreasonable restraint of trade.
Article 4 Deleted.
Article 5 Deleted.
Article 6 No entrepreneur shall enter into an international agreement or an international contract which contains such matters as fall under unreasonable restraint of trade or unfair trade practices.
Article 7 (1) In case there exists any act in violation of the provisions of Article 3 or the preceding Article, the Fair Trade Commission may, pursuant to the procedures as provided for in Section 2 of Chapter VIII, order the relevant entrepreneur to cease and desist from the said acts, to transfer a part of his business, or to take any other measures necessary to eliminate such acts in violation of the said provisions.
(2) The Fair Trade Commission may, when it finds it particularly necessary, even when an act in violation of the provisions of Article 3 or the preceding Article has already ceased to exist, pursuant to the procedures as provided for in Section 2 of Chapter VIII, order the relevant entrepreneur, to take measures to make public that the said act has been discontinued and any other measures necessary to ensure elimination of the said act; provided, however, that this shall not apply to cases where three years have passed since the date of discontinuation of the said act.
Article 7-2 (1) In case any entrepreneur effects an unreasonable restraint of trade or enters into an international agreement or an international contract containing such matters as fall under unreasonable restraint of trade, and such act falls under any of the following items, the Fair Trade Commission shall order the said entrepreneur, pursuant to the procedures as provided for in Section 2 of Chapter VIII, to pay to the national treasury a surcharge of an amount equivalent to an amount calculated by multiplying the sales amount of the relevant goods or services calculated pursuant to the method provided for by a Cabinet Order (in the case that the said act is pertaining to the receipt of supply of goods or services, the purchase amount of the relevant goods or services calculated pursuant to the method provided for by a Cabinet Order), for the period from the date on which the entrepreneur effected the business activities constituting the said act to the date on which the business activities constituting the said act were discontinued (in case such period exceeds three years, the period shall be the three years preceding the date on which the business activities constituting the said act were discontinued; hereinafter referred to as "period of implementation") by ten percent (three percent in case of retail business, or two percent in case of wholesale business); provided, however, that in case the amount thus calculated is less than one million yen, the Commission shall not order the payment of such a surcharge. (iii) Any corporation whose amount of capital or total amount of contribution is not more than fifty million yen and any corporation or individual whose number of regular employees is not more than one hundred, which operates as its principal business, business belonging to service business (excluding the lines of businesses provided for by a Cabinet Order pursuant to item 5); (including federation of partnerships), any partnership which has a scale comparable to the scale provided for in each of the preceding items for the individual line of business in the preceding items as provided for by a Cabinet Order. paragraph 13 or 16, or a decision pursuant to the provisions of paragraph 2 of Article 51 within ten years counting retroactively from the date when the entrepreneur received the advance notice pertaining to the said violation in the case that neither the measure listed in item 4 of paragraph 1 of Article 47 nor the measure provided for in paragraph 1 of Article 102 was made. paragraph 1 or a notice pursuant to the provisions of next paragraph to entrepreneurs that submitted reports and materials pursuant to the provisions of item 1 of paragraph 7, item 1 or 2 of paragraph 8, or item 1 of paragraph 9, these provisions shall not apply, notwithstanding the provisions of paragraphs 7 to 9 inclusive: (iii) In the case pertaining to the violation committed by the relevant entrepreneur, the said entrepreneur coerced another entrepreneur to commit the violation provided for in paragraph 1 or blocked another entrepreneur from discontinuing the said violation. Chapter III Trade Associations
Article 8 (1) No trade association shall engage in any act which falls under any of the following items: (iii) Limiting the present or future number of entrepreneurs in any particular field of business; particularly necessary, pursuant to the procedures as provided for in Section 2 of Chapter VIII, also order an officer, manager, or constituent entrepreneur (including the relevant entrepreneur when an officer, employee, agent, or any other person acting for the benefit of an entrepreneur is a constituent entrepreneur; the same shall apply in paragraph 1 of Article 26 and paragraph 2 of Article 59) of the said association to take measures necessary to ensure the measures provided for in paragraph 1 or paragraph 2 of Article 7, as applied mutatis mutandis pursuant to the preceding paragraph.
Article 8-3 The provisions of paragraphs 1, 3 to 5 inclusive, 7 to 13 inclusive, 17, 18 and 21 of Article 7-2 shall apply mutatis mutandis to cases where an act is committed in violation of the provisions of item 1 of paragraph 1 of Article 8 (limited to cases of committing an act which falls under unreasonable restraint of trade) or item 2 thereof (limited to cases of entering into an international agreement or an international contract which contains such matters as fall under unreasonable restraint of trade). In this case, in paragraph 1 of Article 7-2, the term "entrepreneur" shall be deemed to be replaced with "trade association"; and the term "order the said entrepreneur" shall be deemed to be replaced with "order the constituent entrepreneur of the said trade association (including the relevant entrepreneur when an officer, employee, agent, or any other person acting for the benefit of an entrepreneur is a constituent entrepreneur; hereinafter referred to as "specified entrepreneur" in this Article)"; in paragraph 4 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; in paragraph 5 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "had discontinued the relevant violation (limited to cases where the period of implementation pertaining to the violation is less than two years, except for cases that fall under the next paragraph)" shall be deemed to be replaced with "had discontinued the business activities that constituted the relevant violation (limited to cases where the period of implementation of the business activities that constituted the relevant violation is less than two years)"; in paragraph 7 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "entrepreneurs that committed the relevant violation" shall be deemed to be replaced with "specified entrepreneurs of the trade association that committed the relevant violation"; and the term "has not committed" shall be deemed to be replaced with "has not effected the business activities that constituted"; in paragraph 8 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "paragraph 1 or 4 to 6 inclusive" shall be deemed to be replaced with "paragraph 1, 4, or 5"; the term "entrepreneurs that committed the relevant violation" shall be deemed to be replaced with "specified entrepreneurs of the trade association that committed the relevant violation"; and the term "has not committed" shall be deemed to be replaced with "has not effected the business activities that constituted"; in paragraph 9 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "entrepreneur that committed the relevant violation" shall be deemed to be replaced with "specified entrepreneur of the trade association that committed the relevant violation"; and the term "paragraph 1 or 4 to 6 inclusive" shall be deemed to be replaced with "paragraph 1, 4, or 5"; and the term " has not committed" shall be deemed to be replaced with "has not effected the business activities that constituted"; in paragraphs 10 and 11 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; in paragraph 12 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; the term "committed by the relevant entrepreneur" shall be deemed to be replaced with "committed by the relevant trade association"; the term "commit the violation provided for in paragraph 1" shall be deemed to be replaced with "effect the business activities that constituted the relevant violation"; and the term "discontinuing" shall be deemed to be replaced with "discontinuing the business activities that constituted"; in paragraph 13 of the said Article, the term "entrepreneur" shall be deemed to be replaced with "specified entrepreneur"; and the term "violation committed" shall be deemed to be replaced with "report submitted pursuant to the provisions of item 1 of the same paragraph"; and in paragraphs 17 and 18 of the said Article, the term "paragraphs 1, 4 to 6 inclusive, 8, 9, and 14" shall be deemed to be replaced with "paragraphs 1, 4, 5, 8, and 9".
Chapter III-2 Monopolistic Situations
Article 8-4 (1) When a monopolistic situation exists, the Fair Trade Commission may order the relevant entrepreneur, pursuant to the procedures provided for in Section 2 of Chapter VIII, to transfer a part of its business or to take any other measures necessary to restore competition with respect to the relevant goods or services; provided, however, that this shall not apply to cases where it is found that such measures may, in relation to the said entrepreneur, reduce the scale of business to such an extent that the expenses required for the supply of goods or services which the said entrepreneur supplies will rise sharply, undermine its financial position, or make it difficult to maintain its international competitiveness, or where such alternative measures may be taken that is found sufficient to restore competition with respect to the relevant goods or services.
(2) In issuing an order pursuant to the preceding paragraph, the Fair Trade Commission shall give consideration, based on the matters listed in the following items, to the smooth operation of business activities by the relevant entrepreneur and entrepreneurs affiliated therewith and the stabilization of life of those employed by the said entrepreneur: (iii) Location and other locational conditions of factories, workplaces, and (vii) Capacity for and situations of funding and procurement;
(viii) Situations of supply and distribution of goods or services.
Chapter IV Stockholdings, Interlocking Directors, Mergers, Demergers, and Acquisitions of Business
Article 9 (1) Any corporation, which may be to cause excessive concentration of economic power through holding of the stocks (including shares held by a member; the same shall apply hereinafter) of other corporations in Japan, shall not be established. Article 11 (1) No corporation engaged in banking or insurance business shall acquire or hold voting rights in another corporation in Japan if it results in its holding in excess of five percent (ten percent in the case of a corporation engaged in insurance business; the same shall apply in the next paragraph) of voting rights of all stockholders; provided, however, that this shall not apply to cases where approval of the Fair Trade Commission is obtained in advance pursuant to the provisions of the Rules of the Fair Trade Commission, or to cases falling under any of the following items: (iii) Cases where voting rights are acquired or held by acquisition or holding of the stocks in the form of trust property pertaining to monetary or security trust; Article 12 Deleted.
Article 13 (1) Neither an director nor an employee (meaning in this Article a person other than directors engaged in the business of a corporation on a regular basis) of a corporation shall hold at the same time a position as an director of another corporation where the effect of such an interlocking directorate may be substantially to restrain competition in any particular field of trade.
(2) No corporation shall coerce another corporation in competition with it in Japan through unfair trade practices, to admit its directors concurrently to the position of director or employee of the latter corporation, or to admit its employee concurrently to the position of director of the latter corporation.
Article 14 No person other than corporations shall acquire or hold stocks of a corporation where the effect of such acquisition or holding of stocks may be substantially to restrain competition in any particular field of trade, or shall acquire or hold stocks of a corporation through unfair trade practices.
Article 15 (1) No corporation shall effect a merger if any of the following items applies: (2) Every corporation in Japan which intends to become a party to a merger (hereinafter in this Article "merging corporation") shall, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Fair Trade Commission in advance of their plan with regard to such merger, in case that the sum of the total assets of one corporation exceeds the amount, provided for in a Cabinet Order, which shall not be less than ten billion yen, and the sum of the total assets of another merging corporation exceeds the amount, provided for in a Cabinet Order, which shall not be less than one billion yen; provided, however, that this shall not apply to such cases falling under any of the following items: plan regarding the merger notified pursuant to the provisions of paragraph 2.
(6) In cases falling under the provisions of item 1 of the preceding paragraph, the Fair Trade Commission shall send a notification under the main clause of the preceding paragraph within one year from the deadline in the same item if it intends to order necessary measures relating to the relevant merger pursuant to the provisions of paragraph 1 of Article 17-2.
Article 15-2 (1) No corporation shall effect a joint incorporation-type demerger (meaning an incorporation-type demerger that a corporation effects jointly with another corporation; the same shall apply hereinafter) or an absorption-type demerger if any of the following items applies: orders made by the Fair Trade Commission pursuant to the provisions of paragraph 1 of Article 17-2. In this case, the term "merger" in paragraphs 4 and 6 of the preceding Article shall be deemed to be replaced with "joint incorporation-type demerger or absorption-type demerger"; the term "regarding the merger" appearing in paragraph 5 of the preceding Article shall be deemed to be replaced with "regarding the joint incorporation-type demerger or absorption-type demerger"; and the term "merging corporations" therein shall be deemed to be replaced with "corporations which intend to become parties to a joint incorporation-type demerger or an absorption-type demerger".
Article 16 (1) No corporation shall perform an act falling under any of the following acts, where the effect of such act may be substantially to restrain competition in any particular field of trade, or through unfair trade practices: (iii) Taking on a lease of the whole or a substantial part of the business of Article 17 No acts in whatever form or manner shall be committed which evade such prohibitions or restrictions as provided for in the provisions of Articles 9 to 16 inclusive.
Article 17-2 (1) Where there exists any act in violation of the provisions of paragraph 1 of Article 10, paragraph 1 of Article 11, paragraph 1 of Article 15, paragraph 1 of Article 15-2, paragraph 1 of Article 16, or the preceding Article, the Fair Trade Commission may, pursuant to the procedures prescribed in Section 2 of Chapter VIII, order the entrepreneur concerned to dispose of all or some of its stocks, to transfer a part of its business, or to take any other measures necessary to eliminate such acts in violation of the said provisions.
(2) Where there exists any act in violation of the provisions of paragraph 1 or 2 of Article 9, Article 13, Article 14, or the preceding Article, the Fair Trade Commission may, pursuant to the procedures prescribed in Section 2 of Chapter VIII, order the person violating such provisions to dispose of all or some of his or her stocks, to resign from his or her position as an officer of the corporation, or to take any other measures necessary to eliminate such acts in violation of the said provisions.
Article 18 (1) The Fair Trade Commission may, in cases where corporations have merged in violation of the provisions of paragraph 2 of Article 15 (including the cases where it is applied mutatis mutandis pursuant to paragraph 3 of Article 15 after deemed replacement) and paragraph 4 of Article 15, bring a lawsuit to have the said merger declared invalid.
(2) The provisions of the preceding paragraph shall apply mutatis mutandis to the cases where corporations have effected a joint incorporation-type demerger or an absorption-type demerger in violation of the provisions of paragraphs 2 and 3 of Article 15-2 (including the cases where they are applied mutatis mutandis pursuant to paragraph 5 of Article 15-2) and paragraph 4 of Article 15, which is applied mutatis mutandis pursuant to paragraph 6 of Article 15-2. In this case, the term "the said merger" in the preceding paragraph shall be deemed to be replaced with "the said joint incorporation-type demerger or the said absorption-type demerger".
Chapter V Unfair Trade Practices
Article 19 No entrepreneur shall employ unfair trade practices.
Article 20 (1) Where there exists any act in violation of the provisions of the preceding Article, the Fair Trade Commission may, pursuant to the procedures prescribed in Section 2 of Chapter VIII, order the ceasing and desisting from the said act, the deleting of the relevant clauses from the contract, or any other measures necessary to eliminate the said act.
(2) The provisions of paragraph 2 of Article 7 shall apply mutatis mutandis to an act in violation of the provisions of the preceding Article.
Chapter VI Exemptions
Article 21 The provisions of this Act shall not apply to such acts recognizable as the exercise of rights under the Copyright Act, the Patent Act, the Utility Model Act, the Design Act, or the Trademark Act.
Article 22 The provisions of this Act shall not apply to such acts of a partnership (including a federation of partnerships) which conforms to the requirements stipulated in each of the following items and which has been formed pursuant to the provisions of law; provided, however, that this shall not apply to the cases where unfair trade practices are employed, or where competition in any particular field of trade is substantially restrained, resulting in unjust increases of prices: (iii) Each partner possesses equal voting rights; and
(iv) If distribution of profits among partners is contemplated, the limits of the distributions are stipulated by laws and regulations or in the articles of partnership.
Article 23 (1) The provisions of this Act shall not apply to legitimate acts performed by an entrepreneur who produces or sells a commodity, which is designated by the Fair Trade Commission and the uniform quality of which is easily identifiable,, in order to fix and maintain the resale price thereof with another entrepreneur who purchases such commodity (this term "resale price" means the price at which the latter entrepreneur or an entrepreneur who purchases such commodity from the latter entrepreneur for sales sells it; the same shall apply hereinafter); provided, however, that this shall not apply to the cases where the said act tends to unreasonably harm the interests of general consumers, or where it is done by an entrepreneur who sells the said commodity against the will of the entrepreneur who produces the said commodity. the cases where a business cooperative, a minor business cooperative, a federation of cooperatives, a commercial and industrial partnership, or a federation of commercial and industrial partnerships purchases such commodities as prescribed in paragraph 2 or such works as prescribed in paragraph 4, for the consumption of persons directly or indirectly constituting the said business cooperative, federation of cooperatives, commercial and industrial partnerships, or a federation of commercial and industrial partnerships: (iii) Act on Mutual Aid Association for National Public Officers; (vii) Labor Union Act;
(viii) Small and Medium-Sized Enterprise Cooperatives Act; (6) When an entrepreneur as prescribed in paragraph 1 has entered into a contract which fixes and maintains the resale price as prescribed in the said paragraph, the entrepreneur shall, pursuant to the provisions of the Rules of the Fair Trade Commission, notify the Fair Trade Commission thereof within thirty days from the date of the contract; provided, however, that this shall not apply if the Rules of the Fair Trade Commission stipulates otherwise.
Chapter VII Injunctions and Damages
Article 24 A person whose interests are infringed or likely to be infringed by an act in violation of the provisions of item 5 of paragraph 1 of Article 8 or Article 19 and who is thereby suffering or likely to suffer extreme damages is entitled to seek the suspension or prevention of such infringements from an entrepreneur or a trade association that infringes or is likely to infringe such interests.
Article 25 (1) Any entrepreneur that has committed an act in violation of the provisions of Articles 3, 6, or 19 (in the case of entrepreneurs who have committed acts in violation of the provisions of Article 6, limited to those entrepreneurs who have effected unreasonable restraint of trade or employed unfair trade practices in the international agreement or contract concerned) and any trade association that has committed an act in violation of the provisions of paragraph 1 of Article 8 shall be liable for damages suffered by another party. Chapter VIII Fair Trade Commission Section 1 Establishment, Duty, Affairs under the Jurisdiction and Organization, etc.
Article 27 (1) The Fair Trade Commission shall, pursuant to the provisions of paragraph 3 of Article 49 of the Act for Establishment of the Cabinet Office (Act No. 89 of 1999), be established, whose duty shall be to achieve the purposes set forth in Article 1.
(2) The Fair Trade Commission shall be administratively attached to the office of the Prime Minister.
Article 27-2 In order to perform the duty set forth in paragraph 1 of the preceding Article, the Fair Trade Commission shall take charge of the following affairs: (iii) Matters relating to regulation on unfair trade practices; Article 28 The chairman and the commissioners of the Fair Trade Commission shall perform their authority independently.
Article 29 (1) The Fair Trade Commission shall consist of a chairman and four commissioners. Article 31 The chairman or a commissioner may not, against his or her will, be dismissed from office while he or she is in office, except in cases falling under any of the following items: (iii) Where he or she has been punished for violation of the provisions of this Act; Article 32 In the case referred to in items (i) or (iii) to (vi) inclusive of the preceding Article, the Prime Minister shall dismiss the chairman or the commissioner concerned from office.
Article 33 (1) The chairman shall preside over the affairs of the Fair Trade Commission and shall represent it. Article 37 The chairman, the commissioners and such staff members of the Fair Trade Commission as may be stipulated by a Cabinet Order may not engage in any of the following acts while he or she is in office: (iii) Engaging in commerce or any other business for pecuniary gain.
Article 38 The chairman, the commissioners and the staff members of the Fair Trade Commission shall not express their opinions outside the Fair Trade Commission on the existence or non-existence of facts or the application of laws and regulations with regard to a case: however, this shall not apply to the cases prescribed in this Act or the cases where the results of his or her research on this Act are published.
Article 39 The chairman, the commissioners and the staff members of the Fair Trade Commission, or any person who once held such position shall not divulge to others or make surreptitious use of the secrets of entrepreneurs which came to his or her knowledge in the course of his or her duties.
Article 40 The Fair Trade Commission may, if necessary for the performance of its duties, order public offices, juridical persons formed by special laws and regulations, entrepreneurs or organizations of entrepreneurs, or their personnel to appear before the Fair Trade Commission, or require them to submit necessary reports, information or materials.
Chapter V Unfair Trade Practices (Articles 19 and 20)
Chapter VI Exemptions (Articles 21 to 23 inclusive)
Chapter VII Injunctions and Damages (Articles 24 to 26 inclusive)
Chapter VIII Fair Trade Commission
Section 2 Procedures (Articles 45 to 70-22 inclusive)
Section 3 Miscellaneous Provisions (Articles 71 to 76 inclusive)
Chapter X Miscellaneous Provisions (Article 88-2)
Chapter XI Penal Provisions (Articles 89 to 100 inclusive)
Chapter XII Compulsory Investigation of Criminal Cases, etc (Articles 101 to
Supplementary Provisions
(iii) Any partnership of which two or more entrepreneurs are partners, or any contractual combination of two or more entrepreneurs.
entrepreneurs are members (including equivalent thereof);
entrepreneurs control the appointment and dismissal of directors or
managers, the management of affairs or continuation of its existence;
(iii) Where the increase in the price of the said particular goods or services supplied by the relevant entrepreneur has been remarkable or the decrease therein has been slight for a considerable period of time in light of the changes in the supply and demand, or changes in the cost of supply, for such particular goods or services, and where, in addition thereto, the said entrepreneur falls under any of the following items during the said period:
(iii) Unjustly inducing or coercing customers of a competitor to deal with
oneself;
services and thereby affecting the consideration:
consideration:
investigation start date in relation to the case pertaining to the said
violation.
the provisions of the Rules of the Fair Trade Commission (excluding cases where the said reports and materials are submitted on or after the investigation start date in relation to the case pertaining to the said violation); (iii) The entrepreneur has not committed the relevant violation since the
investigation start date in relation to the said violation.
submit the requested reports or materials or submits false reports or
materials;
entrepreneurs (meaning an entrepreneur who is a member of the trade
practices.
(iii) Clearinghouses designated in the provisions of the Negotiable Instrument Act (Act No. 20 of 1932) or the Check Act (Act No. 57 of 1933).
offices;
property rights and other technological features;
(iii) A corporation other than those listed in the preceding two items: Two
businesses (excluding holding companies): Eight trillion yen
trillion yen
substitute performance;
merger.
incorporation-type demerger or absorption-type demerger.
not less than one billion yen; (iii) The sum of the total assets of any of the corporations which intends to become a party to the joint incorporation-type demerger (limited to a total succession corporation) exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen, and the net sales recognized in the profit and loss statement which is made together with the latest balance sheet of another corporation which intends to become a party to the same demerger (limited to a substantial part succession corporation), in connection with the part of the business to be succeeded to, exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen (excluding cases that fall under the previous item); (iv) The net sales recognized in the profit and loss statement which is made together with the latest balance sheet of any of the corporations which intends to become a party to the joint incorporation-type demerger (limited to a substantial part succession corporation), in connection with the part of the business to be succeeded to, exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen, and the net sales recognized in the profit and loss statement which is made together with the latest balance sheet of another corporation which intends to become a party to the same demerger (limited to a substantial part succession corporation), in connection with the part of the business to be succeeded to, exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen.
(iii) The net sales recognized in the profit and loss statement which is made together with the latest balance sheet of any of the corporations which intends to become a party to the absorption-type demerger (limited to a corporation that intends to alienate a substantial part of its business through such absorption-type demerger (referred to in the following item as "substantial part succession corporation")), in connection with the part of the business to be alienated, exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen, and the sum of the total assets of the corporation which intends to succeed to the business through such demerger exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen; (iv) The net sales recognized in the profit and loss statement which is made together with the latest balance sheet of any of the corporations which intends to become a party to the absorption-type demerger (limited to a substantial part succession corporation), in connection with the part of the business to be alienated, exceeds the amount stipulated by a Cabinet Order, which is not less than one billion yen, and the sum of the total assets of the corporation which intends to succeed to the business through such demerger exceeds the amount stipulated by a Cabinet Order, which is not less than ten billion yen (excluding cases that fall under the previous item).
corporation which intends to become a party to a joint incorporation-type
demerger or an absorption-type demerger is held by one and the same
corporation.
corporation;
another corporation;
business of another corporation;
transfer the said business, etc. holds a majority of the voting rights of all
stockholders of every other corporation involved;
entrepreneurs or consumers;
(iii)-2 Act on Mutual Aid Association for Local Public Officers, etc.;
(viii)-2 Act on Organizations of Small and Medium Sized Enterprises;
punishment;
obtained in the case referred to in paragraph 4 of the preceding Article.
public entity, or actively engaging in political activities;