Q&A
Kenzo Fujisue (DPJ) discusses the current bill amending the Antimonopoly Act
By Michael Condon
ACCJ Competition Policy Task Force members Joy Fuyuno and Larry Bates, along with ACCJ Journal writer Michael Condon visited upper house member Kenzo Fujisue of the Democratic Party of Japan (DPJ) to discuss the amendments to the bill and the government’s standpoint on anti-monopoly law. The following excerpts represent some of the highlights of the discussion.
Kenzo Fujisue: In the pending bill to amend the AMA (Antimonopoly Act), there are two main improvements. One point is the transparency of the pre-order proceedings. And the second is the appeal procedures.
The pre-order proceedings have been improved by, for example, requiring further explanation by investigators of their reasoning. This is a very big improvement in making the pre-order proceedings more transparent. So now the pre-order proceedings still belong to the JFTC but under the new amendments the Tokyo District Court will accept appeals from the recipient of the JFTC order. In this way the JFTC cannot control the review of its order, so this is a very big improvement, I believe.
Another point is that there will be more JFTC staff, in particular for enforcement of the Subcontract Act. Around 25 staff will be added to the JFTC for this purpose. I believe the JFTC needs to, firstly, focus on protecting SMEs under the Antimonopoly Act, and secondly, to harmonize the JFTC’s review and approval of mergers and acquisitions with global approaches.
Further Reforms
Fujisue: We are not finished yet. We want to make more changes. We want to make the JFTC stronger. They are focused on investigation—not judgment. Judgment will belong to the courts, we think.
Staffing Issues
Fujisue: The JFTC’s role is very much focused on domestic issues. Also, the number of staff is relatively small, which is disappointing. However, now we’re anticipating more active JFTC enforcement against international matters. Already, the JFTC has a new overseas training program including on-the-job training, and stints at foreign universities and law schools. We have also increased the budget for that. We are trying to create a more international outlook for the JFTC.
Changing the system can be easy, but it is difficult to change people’s perspectives and outlooks. This can take a long time.
Joy Fuyuno: One aspect of the due process issue that we are concerned with is the use of economic analysis. In the United States both the Federal Trade Commission and the Department of Justice have many economists that work on competition issues, including single-firm conduct and merger review—do you see that as being important for the JFTC?
Fujisue: I think now the structure and the number of staff is very poor compared with the U.S. FTC but there have been attempts to improve this. For example, there is a staff exchange between the JFTC and the U.S. FTC.
Larry Bates: But in particular, do you think there will be more emphasis on economics training, as well?
Fujisue: Yes, I think so. Since in Japan there is no revolving door, once someone joins the JFTC, it may be for life. It may be a matter of training rather than hiring new people.
Cooperation With The U.S.
Fujisue: Harmonization of economic policies is important, particularly with the USA, I think. I proposed a U.S.-Japan Free Trade Agreement, in response to which many of my DPJ colleagues asked: “Why? Now tariffs are very low so what is the additional issue?” To which I replied: Legal coordination with the United States. In my opinion, China will become bigger and bigger and so how we coordinate with the United States is very important for the Japanese economy and Japanese industry. I would like to make a deeper connection to American industry.
In my opinion, China presents a challenge because it has a very independent approach to regulation. If you look at areas such as their regulation of the Internet, this is clear to see. Possibly their energy and environmental regulation will also be different from other countries. So in my opinion the U.S. and Japan need to help create a standard and a legal framework for the other Asian countries.
About 60 percent of Chinese companies are government-owned and so it is doubtful the Chinese government will ever accept our competition policies. But there are discussions now within the other Asian countries about antitrust law. We can extend our knowledge and experience to Asian countries, which could be very beneficial for them.
This improvement of the global competition law framework is just one example but I believe the U.S. and Japan should make a deeper connection economically, expanding our business into other countries. Both the U.S. and Japan are leaders in advanced technology—in nuclear, environmental, and water management technology, for example, so if we could collaborate in a better way, we could work towards creating a global standard. I believe that this is one way for the Japanese economy to thrive in this century.
