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Results: 4 Answers
Merger Control
4.
Review process
4.1
What is the review process and what is the timetable for that process?
 
Japan
A corporation that plans to notify the Japan Fair Trade Commission (JFTC) concerning a business combination plan may enter into a pre-notification consultation with the JFTC regarding how to make entries on the notification form, how the position of the notifying corporation in the domestic market should be described and so on.

On receipt of a notification form by the JFTC, the notifying corporation is prohibited from effecting the transaction until the 30-day waiting period from the date of receipt of such notification has expired. However, usually upon the notifying party’s request, and where it finds this necessary, the JFTC may shorten this period accordingly.

During the waiting period (standard or shortened), the JFTC will normally either:

  • find that the business combination is not problematic in light of the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade; or
  • find that more detailed review is necessary and request submission of the necessary reports, information or materials.

In the first case above, the JFTC will give notification to the effect that it will not issue a cease and desist order.

In the second case, the period during which the JFTC may give notice prior to a cease and desist order shall be extended up to 120 days after receipt of the notification or 90 days after the date of receipt of all reports, whichever is later.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.2
Are there any formal or informal ways of accelerating the timetable for review? Can the authority suspend the timetable for review?
 
Japan
There is a formal way to accelerate the timetable for Phase 1 review. If the notifying party submits to the JFTC a request to shorten the 30-day waiting period, the JFTC will usually shorten this period in cases where business combinations are not problematic in light of the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade.

The authority cannot suspend the timetable for review. Regarding Phase 2 review, however, the JFTC request submission of necessary reports, information or materials, and the period during which the JFTC may give notice prior to a cease and desist order will be extended to 90 days after receipt of all reports. Therefore, the JFTC may extend the timetable for Phase 2 review by requesting the submission of necessary reports, information or materials.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.3
Is there a simplified review process? If so, in what circumstances will it apply?
 
Japan
There is no simplified review process. However, as mentioned in question 4.2, the JFTC will usually shorten the waiting period in cases where business combinations are not problematic in light of the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.4
To what extent will the authority cooperate with its counterparts in other jurisdictions during the review process?
 
Japan
The JFTC will cooperate with its counterparts in other jurisdictions during the review process.

For example, in fiscal year 2017, the JFTC cooperated with EU and Korean counterparts in relation to the business combination of Qualcomm River Holdings BV and NXP Semiconductors NV; with US and EU counterparts in relation to the business combination of Broadcom Limited and Brocade Communications Systems, Inc; and with EU and Chilean counterparts in relation to the business combination of Kawasaki Kisen Kaisha, Ltd, Mitsui OSK Lines, Ltd and Nippon Yusen Kabushiki Kaisha.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.5
What information-gathering powers does the authority have during the review process?
 
Japan
The JFTC has no formal information-gathering powers during the Phase 1 review process, but does have formal information-gathering powers to request the submission of necessary reports, information and materials during the Phase 2 review process.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.6
Is there an opportunity for third parties to participate in the review process?
 
Japan
Third parties can informally submit their opinions to the JFTC during the review process.

Particularly during the Phase 2 review process, any third party with an opinion on a business combination plan which has been publicly announced by the JFTC can formally submit a written opinion to the JFTC within 30 days of such publication.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.7
In cross-border transactions, is a local carve-out possible to avoid delaying closing while the review is ongoing?
 
Japan
There have been no publicised cases in which the JFTC has permitted a local carve-out to close a transaction in Japan while the review in other jurisdictions is ongoing.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.8
What substantive test will the authority apply in reviewing the transaction? Does this test vary depending on sector?
 
Japan
The JFTC reviews individual transactions in light of whether competition in any particular field of trade will be substantially restrained. For example, to decide whether a horizontal business combination may serve to substantially restrain competition in a particular field, the following determining factors are given comprehensive consideration:

  • the market positions of the parties and their competitors;
  • imports;
  • market entry;
  • competitive pressure from related or neighbouring markets;
  • competitive pressure from users;
  • overall business capabilities;
  • efficiency; and
  • the financial strength of the parties.

The Guidelines on the Application of the Anti-monopoly Act for Reviewing Business Combinations include certain safe harbour provisions for horizontal business combinations, and for vertical and conglomerate business combinations, based on the Herfindahl-Hirschman Index (HHI). For example, for horizontal business combinations, the criteria suggested by the Merger Guidelines are as follows:

  • The HHI after the business combination is not more than 1,500;
  • The HHI after the business combination is more than 1,500 but not more than 2,500 and the increase in HHI is not more than 250; or
  • The HHI after the business combination is more than 2,500 and the increase in HHI is not more than 150.

This test does not vary depending on sector.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.9
Does a different substantive test apply to joint ventures?
 
Japan
No. There is no specific substantive test for joint ventures and, in principle, the substantive test set out in question 4.8 also applies to joint ventures.

For more information about this answer please contact: Kentaro Toda from TMI Associates
4.10
What theories of harm will the authority consider when reviewing the transaction? Will the authority consider any non-competition related issues (eg, labour or social issues)?
 
Japan
The Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade and the Guidelines on the Application of the Anti-monopoly Act for Reviewing Business Combinations do not address theories of harm directly, and the JFTC reviews the transaction in light of whether competition in any particular field of trade would be substantially restrained.

In addition, the act and the guidelines do not expressly include non-competition issues to be considered in the review process.

For more information about this answer please contact: Kentaro Toda from TMI Associates