Fair Trade Commission vs. MITI: History of the Conflicts between the Antimonopoly Policy and the Industrial Policy in the Post War Period of Japan
Vol.
Fair Trade Commission vs. MITI: Histor y of the Conflicts between the Antimonopoly Polic y and the Industrial Polic y in the Post War Period of Japan
Seichi Yoshikawa 0 1
0 Thi s Article is brought to you for free and open access by the Student Journals at Case Western Reserve University School of Law Scholarly Commons. It has been accepted for inclusion in Case Western Reserve Journal of International Law by an authorized administrator of Case Western Reserve University School of Law Scholarly Commons
1 Seichi Yoshikawa, Fair Trade Commission vs. MITI: History of the Conflicts between the Antimonopoly Policy and the Industrial Policy in the Post War Period of Japan , 15 Case W. Res. J. Int'l L. 489 (1983) Available at:
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Fair Trade Commission vs. MITI: History of the
Conflicts Between the Antimonopoly Policy and the
Industrial Policy in the Post War Period of Japan
by Seichi Yoshikawa*
I. INTRODUCTION
S ince Japanese business activities have expanded on the
international level, the Japanese government's behavior and economic policy
have attracted increased attention from foreign businessmen, government
officials and economists. One particular point of interest to foreign
observers seems to be the apparent fact that in Japan various mechanisms
exist to restrict the competition among enterprises. Certain terminologies,
such as "Japan, Inc.," have been invented to refer to the seemingly
unique business environment of Japan. Against such theory some
economists argue that the Japanese market is highly competitive, even more so
than that of the United States or of the economy of England, where
important industries are nationalized.' It is nearly an undeniable fact,
however, that the Japanese antimonopoly (or antitrust) policy has been
considerably circumscribed by what is called the "industrial policy" of the
Japanese government, administered most notably by its Ministry of
International Trade and Industry (MITI).
Japanese antimonopoly policy is enforced by the Japanese Fair
Trade Commission (FTC) based on the Law Relating to the Prohibition
of Private Monopoly and Methods of Preserving Fair Trade
(Antimonopoly Law).2 When the Antimonopoly Law was promulgated shortly after
World War II, it was termed the "Economic Constitution," which meant
that all the economic policy and business activities were to be conducted
in accordance with the mandate of free competition that it embodied.
The Antimonopoly Law prohibits "private monopolies," "unreasonable
*Partner; Koga, Yoshikawa, Yamakawa & Nakagawa of Tokyo Japan.
Tsujimura, Sango seisaku no honshitsuto dockkin seisaku (Essence of the Industrial
Policy and the Antimonopoly Policy), ECON011STO, 10-11 (Jan. 25, 1983).
2 Shiteki dokusen no kinshi oyobi kWsei torihiki no kakuho ni kansuru h-ritsu (Law
Relating to the Prohibition of Private Monopoly and Methods of Preserving Fair Trade),
Law No. 54 of 1947 (as amended), translatedin 2 EmuN-HoREm SHA LAW BULLETIN SERIES
KA [hereinafter cited as Antimonopoly Law].
restraint of trade," s and "unfair business practices."' The FTC is
equipped with broad powers, comparable to those given to the U.S.
Federal Trade Commission, to enforce the Law. Yet, the restrictions on
business activity imposed by the Antimonopoly Law have not been consistent
with the industrial policy administered by MITI. On many occasions
"battles" or "adjustments" between the FTC and MITI occurred over
conflicts between the respective policies, and it is fair to state that MITI
has had the better of the situation most of the time. However, by
reviewing the relaxation of restrictions on cartels that occurred during the
postwar period and the present status of the restrictions on cartels, certain
new trends in Japanese antimonopoly policy become manifest.
II. RELAXATION OF RESTRICTIONS ON CARTELS
A. Stipulated in OriginalAntimonopoly Law
The Antimonopoly Law was promulgated in 1947 as one important
part of the policy of the Allied Forces for the democratization of the
Japanese economic environment. This original legislation reflected the
idealism of the New Dealer economists of the Supreme Command Allied
Powers (SCAP) and contained much stricter antimonopoly regulations than
its American counterpart. In particular, Article 4 of the Antimonopoly
Law flatly prohibited, with minor exceptions, entrepreneurs from
conducting any concerted activities (cartels) for deciding, maintaining or
increasing prices, restricting production or sales volume, restricting
technology, products, distribition channels or customers or limiting the new
installment or expansion of production facilities or the employment of
new production methods.5 Likewise, Article 8 provided that if the FTC
found an "undue imbalance of business capabilities," it could order the
entrepreneurs concerned to take necessary measures, such as the transfer
of business facilities, to eliminate the imbalance. Further, Chapter 4 of
the Antimonopoly Law imposed sweeping restrictions on all sorts of (...truncated)