Extraterritoriality in Japanese Competition Law: Reaching Foreign Entities in the Face of Changing Global Norms

Abstract

The Japanese Antimonopoly Act (AMA, 1947) does not state how far its provisions reach internationally, and the Japan Fair Trade Commission (JFTC) has been very cautious about applying the AMA to actions taken abroad. Instead, there is a special provision, Article 6, that prohibits enterprises from being parties to anticompetitive international agreements, and the JFTC applied this to Japanese companies for a few decades after the AMA was enacted. ... Changes in international norms prompted the JFTC to engage in a gradual shift from partial enforcement of the AMA to extraterritorial application to foreign entities. The Supreme Court’s Cathode Ray Tube (CRT) judgement (2017) is a milestone case, as the court finally pronounced that the AMA was applicable to foreign companies’ actions abroad if those actions affect the free competition regime in Japan. In the paper, the historical development of the JFTC’s decisional practice, focusing on Article 6, is examined first, and the paper considers what prompted it to change. The CRT case is then examined, and the remaining issues and future directions that Japan should take, particularly regarding the regulation of export cartels, are explored.