Antitrust Enforcement and Non-Enforcement as a Barrier to Import in the Japanese Automobile Industry

Abstract

Foreign automobile manufacturers long have found it difficult to compete in the Japanese automobile market. For decades, governmentally imposed restraints prevented foreign manufacturers from gaining a foothold in the Japanese market. In recent decades, these governmental restrictions have been replaced by private restraints which create equally formidable barriers to entry. Many private restraints persist despite repeated informal investigations and administrative guidance by the Japan Fair trade Commission (JFTC). The endurance of these private restraints raises the question of what mechanisms may be available to make the Japanese automobile market more contestable. While vigorous and transparent enforcement of Japan's Antimonopoly Law by the JFTC is the preferred mechanism, other mechanisms for alleviating these private restraints include the extraterritorial enforcement of U.S. antitrust laws by U.S. antitrust enforcement authorities, mediation by the OECD or the enforcement of an international competition code in an international forum.