Vertical restraints in Japan

Abstract

Resale price maintenance (r.p.m), exclusive dealing stipulations, and customer restrictions are all widespread in Japan, particularly for consumer products. Analysis of specific antitrust cases demonstrated that standard economic arguments can account for vertical restraints by Japanese makers. The models that apply include the maker cartel and wholesaler cartel theories of r.p.m., the successive monopoly theory of maker-imposed maximum resale price, the price discrimination theory of r.p.m., and the protection of maker investment theory of exclusive theory of exclusive dealing. Claims that marketing practices in Japan are based on culture and tradition rather than economic logic should be regarded with skepticism.