Stick, Carrot, and Privilege: Parliament Passes Major Amendments to Japanese Anti-Monopoly Act

07/17/2019
Client Alert

The Upper House (sangi-in) on June 19, 2019, finally passed the bill to make major amendments to the Anti-Monopoly Act (the “AMA”)–the Japanese antitrust law. Submitted to Parliament on March 12, 2019, the bill has now become law. No changes have been made to the bill since it was submitted.

The new law will come into force no later than a year and a half from its promulgation in the Official Gazette (kampo) on June 26, 2019. Therefore, it is highly likely that it will actually come into force toward the end of 2020.[1]

The new law includes amendments to (i) variable fines, (ii) attorney-client privilege and (iii) expanded scope of sales revenues as a basis to calculate fines, which will have a large impact on businesses.[2]

Both the Upper House and Lower House (shugi-in) made accessory resolutions[3] requiring the government to strengthen its efforts to enhance predictability and due process for businesses in implementing these amendments.

To that end, the Japan Fair Trade Commission (the “JFTC”) will institute more guidance in the form of rules and guidelines on issues that are not necessarily clear under the new law, such as guidance explaining what constitutes evidence that would help to reveal truth and how much of a reduction in fines a leniency applicant with such evidence would be offered (concerning (i) above) or what will be protected by privilege or how privilege should be exercised (concerning (ii) above).

In the past, public comments have been sought for these kinds of supplemental rules and guidelines. Accordingly, it is also likely that the JFTC will solicit comments from the public on the draft supplemental rules and guidelines for the new law.

Needless to say, it is important for firms to familiarize themselves with the new law. It is also important for firms to stay updated on draft rules and guidelines that are published, as well as the public’s comments on these guidelines.

 


[1] The actual date will be specified by the Cabinet Order.

[2] For a summary of the bill and amendments thereto, please see “Heavier, Variable Fines and Privileges: Japan Will Enhance Fines Under Anti Monopoly Act”.

[3] More precisely, the Economy and Industry Committee of each House.

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