Japanese competition law consists of the , officially the ,
and several other statutory laws.
The AMA was introduced during the postwar United States-led-and-controlled Allied
occupation
Occupation commonly refers to:
*Occupation (human activity), or job, one's role in society, often a regular activity performed for payment
*Occupation (protest), political demonstration by holding public or symbolic spaces
*Military occupation, th ...
.
President
President most commonly refers to:
*President (corporate title)
*President (education), a leader of a college or university
*President (government title)
President may also refer to:
Automobiles
* Nissan President, a 1966–2010 Japanese ful ...
Harry S. Truman
Harry S. Truman (May 8, 1884December 26, 1972) was the 33rd president of the United States, serving from 1945 to 1953. A leader of the Democratic Party, he previously served as the 34th vice president from January to April 1945 under Franklin ...
, on 6 September 1945, issued a
presidential directive
A presidential directive, or executive action, is a written or oral instruction or declaration issued by the president of the United States, which may draw upon the powers vested in the president by the U.S. Constitution, statutory law, or, in cert ...
instructing the
Supreme Commander for the Allied Powers
was the title held by General Douglas MacArthur during the United States-led Allied occupation of Japan following World War II. It issued SCAP Directives (alias SCAPIN, SCAP Index Number) to the Japanese government, aiming to suppress its "milit ...
(SCAP) to dissolve
Zaibatsu
is a Japanese language, Japanese term referring to industrial and financial vertical integration, vertically integrated business conglomerate (company), conglomerates in the Empire of Japan, whose influence and size allowed control over signi ...
structures. Prior to
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
,
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
had no
antitrust law
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
s. There were seventeen Zaibatsu organisations, the four largest of which had controlled approximately a fourth of all of the paid-up capital in the Japanese economy just prior to the World War.
In opposition to General MacArthur's fear that Zaibatsu dissolution would lead to instability, the U.S. Departments of State and Justice sent a "Special Mission on Japanese Combines" to Japan for the implementation of a comprehensive antimonopoly framework. In response, MacArthur coerced the
Japanese Diet
The is the national legislature of Japan. It is composed of a lower house, called the House of Representatives (, ''Shūgiin''), and an upper house, the House of Councillors (, '' Sangiin''). Both houses are directly elected under a paralle ...
into adopting legislation known as the Antimonopoly Act (AMA), with the persuasion to them that enforcement was optional.
Antimonopoly Act
MacArthur's AMA, which is still Japan's fundamental competition law, generalised prohibitions against three types of anticompetitive conduct.
*private monopolization
*unreasonable restraints of trade and
*unfair methods of competition.
The AMA led to the formation of
Japan's Fair Trade Commission (JFTC).
Relaxation of the Act
The weakness of the AMA was due to vagueness requiring JFTC officials to be familiar with presumptions built into
American antitrust laws. Seeing the need for stability and the growing threat of
Communism
Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a s ...
, the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
backtracked on requiring Japan's enforcement of the AMA and instead encouraged the resurrection of Zaibatsu structures.
Japan, which had grown increasingly independent of the United States in the 1950s, succumbed to pressures from Japanese business and need for recovery from economic depression due to the end of the
Korean War
, date = {{Ubl, 25 June 1950 – 27 July 1953 (''de facto'')({{Age in years, months, weeks and days, month1=6, day1=25, year1=1950, month2=7, day2=27, year2=1953), 25 June 1950 – present (''de jure'')({{Age in years, months, weeks a ...
. The SCAP and the U.S. Government acquiesced to
Prime Minister Yoshida's actions to enact relaxations to the AMA when occupation of Japan ended with the implementation of the
San Francisco Peace Treaty
The , also called the , re-established peaceful relations between Japan and the Allied Powers on behalf of the United Nations by ending the legal state of war and providing for redress for hostile actions up to and including World War II. It w ...
on 28 April 1952. All cartels illegal under the original AMA were effectively legalized.
Strengthening of the Act
Amendments were made to strengthen the AMA in the 1970s due to, in part, pressures from American businesses. The
1973 oil crisis
The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had supp ...
and price fixing by Japanese oil companies further garnered public opinion in Japan against the weakness of the AMA and its lack of enforcement. The new articles introduced authorised the JFTC to dissolve or divest a company based on barriers against market-entry, lack of price benefit for consumers and unreasonable profits. The JFTC was authorised to impose fines for violations of the AMA.
Cartels still exist
However, the existence of
cartel
A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Mos ...
s known as
keiretsu
A is a set of companies with interlocking business relationships and shareholdings. In the legal sense, it is a type of informal business group that are loosely organized alliances within the social world of Japan's business community. The ''ke ...
are still legalized with the following notes.
*Cartels calculate penalties beforehand and include such penalties as costs of business.
*Penalty calculations, which do not correlate with profits, present insufficient financial disincentives for businesses to collude.
*Courts in Japan lack
contempt powers to ensure compliance with the JFTC's cease and desist orders.
See also
*
Law of Japan
The law of Japan refers to legal system in Japan, which is primarily based on legal codes and statutes, with precedents also playing an important role. Japan has a civil law legal system with six legal codes, which were greatly influenced by Ger ...
References
*Fry, James D. "Struggling to teethe: Japan's antitrust enforcement regime," in ''Law and Policy in International Business'', Summer 2001
{{Competition law by country
Japanese business law
Competition law by country