Anti-Cartel Enforcement in Japan: Does Leniency Make the Difference?

Abstract

Leniency under the Japanese Antimonopoly Law (AML) is claimed to have been a success. Toshiyuki Nambu, an official of the Japan Fair Trade Commission (JFTC) writing in his personal capacity, recently expressed this opinion in an article with the telling title ‘A Successful Story: Leniency and (International) Cartel Enforcement in Japan’. Nambu’s assessment is in line with those expressed by several early observers of the leniency programme. Former Chairman of the JFTC, Kazuhiko Takeshima claimed ‘that the leniency programme has produced significant results since its introduction.’ And an international firm of solicitors has similarly claimed that with leniency ‘the JFTC now has teeth’. Akinori Uesugi, formulating his observations one year after the leniency programme went into effect in 2006, gave direction for drawing such conclusions. The leniency programme, he observed, had triggered high number of leniency applications, giving way to a smooth decision making process by the JFTC. The number of leniency applications and the process of decision-making tell a partial story only, and they are insufficient measures for assessing the success or otherwise of a leniency programme. A leniency programme is an enforcement tool, aimed at facilitating both deterrence and detection of cartels. To appreciate fully the effectiveness of a leniency programme, and to assess any overarching policy on cartel deterrence and detection, more information is required. While acknowledging the high rate of leniency applications in Japan and the possible conclusions that can be drawn from it, this chapter draws on additional data, including the nature of the firms applying for leniency, the nature of the cartels detected through leniency and the extent to which leniency applications are followed by infringement decisions by the JFTC. Based upon this data, the chapter offers a more rigorous and complete assessment of the effectiveness of the Japanese leniency programme to date.