Competition Inspections In 25 Jurisdictions - Japan Chapter

The Anti-Monopoly Act of Japan ("AMA") affords the Japan Fair Trade Commission ("JFTC") the primary jurisdiction over competition issues (and particularly allegations...
Japan Antitrust/Competition Law
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  1. The Anti-Monopoly Act of Japan (“AMA”) affords the Japan Fair Trade Commission (“JFTC”) the primary jurisdiction over competition issues (and particularly allegations of violations of the AMA that require competition inspections). The JFTC's investigation bureau always tries to collect information on potential cases through various measures, including acceptance of leniency applications, tip-offs, requests for formal investigation from victims, and so on, and picks up appropriate cases when it takes the view that the launch of a formal investigation is warranted. So as not to create any opportunity for the target companies to destroy documents or data, the JFTC's dawn raid is typically unannounced. The JFTC has the power to decide at its discretion to order on-site inspections without prior judicial authorisation, and there is no limitation to the scope of the inspection by the investigators under Article 47, paragraph 1, items 3 and 4 of the AMA. Therefore, the investigators may inspect any place within the business, including the legal department and back-office functions, as long as they reasonably consider such searches to be necessary for investigating the alleged violation. Private homes and cars owned by officers or employees may also be subject to dawn raids, to the extent relevant evidence is reasonably expected to be found there.
  2. Before the Covid-19 pandemic, the JFTC conducted dawn raids actively in a wide range of infringement cases, including cartels, private monopolisation and unfair trade practices, around ten times per year. While the JFTC appears to have refrained from conducting dawn raids due to Covid-19 restrictions, in particular during the state of emergency, the JFTC has recently resumed conducting dawn raids after the state of emergency was lifted. In fact, the JFTC conducted dawn raids at least eight times from January 2023 to October 2023, which means that the JFTC seems to have returned to a pre-Covid-19 pandemic activity level. Therefore, it is fair to say that the preparedness for dawn raids by the JFTC should be important for companies doing business in Japan.
  3. Since most investigation cases, in particular those involving foreign companies, are administrative investigations, the explanations herein will focus on administrative investigations except where a particular reference to criminal investigations is made.
  4. We note that the laws and practices in Japan in terms of competition inspections are considerably different from those in Europe or the United States. In addition, in terms of the practice of competition agencies to launch simultaneous multijurisdictional investigations across continents and whose implications can be potentially very significant, the JFTC is typically the first competition authority to conduct dawn raids, largely due to it being located in one of the earliest time zones. Since dawn raids in Japan typically start within a few hours from midnight, European time, trying to coordinate between the European headquarters and the Japanese subsidiary as to how to respond to the dawn raid may put the Japanese subsidiary in a highly disadvantageous position. This is because in Japan any reduction of the fine available through a post-raid leniency application depends partly on how quickly such leniency application is filed. Further, the initiation of the determination procedure (see section 4.1 below) must be requested by the closure of the dawn raid (typically in the evening, Japan time, which is early in the morning, European time). Therefore, we would emphasise the necessity for upstream preparedness to counter the time difference disadvantage that international companies headquartered within different time zones may face in the case of a dawn raid of their Japanese subsidiary.

1. Nature and Scope of Competition Inspections

1.1. Enforcement and Investigation Powers

  1. Under the AMA, the JFTC is entitled to decide at its discretion to order on-site inspections without prior judicial authorisation. The JFTC has its own investigation divisions as part of its investigation bureau, and the JFTC officials who work for such divisions undertake dawn raids and subsequent investigations as investigators.
  2. Apart from dawn raids, the JFTC has the power to order requests for information that need to be responded to by the companies being investigated. It is common practice for the JFTC to request companies to submit relevant documents from time to time. The JFTC may also deliver “Reporting Orders” and “Production Orders” in a timely manner to secure precise information on the alleged violation in preparation for issuing a cease-and-desist order and surcharge payment order. The JFTC typically asks officers and employees of the raided companies (or other interested parties) to appear for voluntary interviews, and is also entitled to order an interrogation procedure if interviewees do not cooperate with a voluntary interview.

1.2. Competent Authorities and Agents

  1. The authority in charge of competition inspections in Japan is the JFTC. The JFTC also cooperates with the Public Prosecutors' Office in connection with criminal cases. This is because criminal actions can only be brought against companies and/or their officers and/or employees by the Public Prosecutors' Office, with the prerequisite of a special request for prosecution issued by the JFTC. Accordingly, it is common that a few prosecutors are seconded to the JFTC for the purpose of close communication and effective enforcement. In this regard, before launching a criminal investigation, the JFTC and the Public Prosecutors' Office jointly conduct dawn raids with the aim of seeking to impose criminal penalties against the companies that have participated in a cartel. Before a special request is issued, the JFTC and the Public Prosecutors' Office exchange information and discuss various issues related to a specific case at a “Referral Issues Roundtable”, which is not open to the public.

1.3. Nature of Inspection Powers

  1. According to the AMA, the JFTC is entitled to conduct on-site inspections, i.e. “dawn raids”, only in connection with investigations on infringements of the AMA. The JFTC cannot conduct on-site inspections in relation to sector investigations.
  2. Such on-site inspection follows Article 47, paragraph 1, item 4 of the AMA. The JFTC investigators are entitled to review and seize any materials they reasonably consider necessary for their investigation under Article 47. Therefore, any documents containing confidential or proprietary information can also be obtained by the investigators.
  3. The JFTC acknowledges that due process must be ensured in the exercise of its inspection powers. However, that does not mean that the JFTC pays high respect to privacy rights. In (the authentic Japanese version of) the “Guidelines on Administrative Investigation Procedures under the Anti-Monopoly Act” (“Administrative Investigation Guidelines”), the term “privacy” is used only once, but only to clarify that goods generally considered highly personal, such as personal belongings (day planners, mobile phones, etc.), may be requested to be produced if such goods are suspected of containing information useful to prove an alleged violation, and the investigator reasonably considers it necessary for the conduct of the investigation. In practice, mobile phones and personal day planners are frequently taken by the JFTC.
  4. A tentative English translation of the Guidelines, which is useful for understanding the JFTC's position on various matters discussed herein, is available at (;

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Originally Published by Concurrences

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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