Answer ... Under the current leniency programme, leniency applicants benefit from a uniform and impartial reduction in the amount of administrative surcharges based on order of application, to the extent that certain predetermined requirements are met (eg, there are five or fewer leniency applicants; the leniency application is submitted within 20 business days of the investigation’s start date). The Japan Fair Trade Commission (JFTC) cannot vary the amount of the reduction based on the degree of cooperation with its investigation, or the nature and extent of the violation. Thus, for companies faced with a cartel investigation, the decision on whether to seek leniency must be made as quickly as possible after the alleged cartel activities are discovered.
As stated in question 9.1, the bill to amend the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade passed the Diet on 19 June 2019. The new leniency programme is designed to increase the incentives for companies to cooperate with the JFTC’s investigation and affords the JFTC some flexibility in determining the rates of reduction based on the degree of cooperation with its investigation. As a result of the amendment, the focus of JFTC cartel enforcement is expected to shift from the speed with which leniency applications are filed to the level of cooperation with the investigation. The new programme will thus increase the need for companies to consult outside counsel on how to cooperate with the JFTC in cartel investigations. Therefore, for companies faced with a cartel investigation, it will become even more important to engage competent and experienced local counsel to navigate the nuances inherent in communications with the JFTC.
Sho Tanaka and Hiroki Kikkawa contributed to this Guide.