A comparative study between EU and Japanese Competition Law. Abuse of a dominant position – exploitative abuses –

Abstract: The competition policy is an area of law that moulds itself according to the structure of the society and evolves by habitually adjusting to the dynamics of the national economies. Due to various historical contexts as well as to the distinct economic systems, the competition law in EU and Japan walked on different paths at different rhythms. However, in both jurisdictions the dissimilarities have been built on the same foundation – the desire to ensure the consumer welfare and to preserve a free and fair competitive environment. Exploitative abuses are practices that inflict harm directly on consumers and despite the fact that in EU such practices have not garnered much awareness in the past three decades their negative effects on the market cannot be overlooked. In EU law the exploitative conducts fall under article 102 TFEU which prohibits any abusive behaviour within the internal market committed by a dominant undertaking. In Japan, exploitative conducts are covered by two provisions within the Anti Monopoly Act: private monopolization by control and unfair trade practices. The concept private monopolization by control depicts the business activity by means of which an entity, or a group of entities, substantially restricts competition in a particular field by controlling the business activities of other enterprises. Substantial restraint of competition is the Japanese correspondent for dominant position, both notions requiring a certain degree of market power. However while in the case of dominant position the market power is a prerequisite element of the abuse, substantial restraint of competition is judged based on the aftermaths of the abusive practice. Unlike its EU counterpart, private monopolization can be executed by indirect control also. Indirect control illustrates a situation in which a certain undertaking is so influential over a market that its behaviour works like a Ripple effect dictating the conditions of the market. When the abusive conduct carried out by an undertaking does not substantially restrict competition, but does however tend to impede competition then it could be classified as an unfair trade practice. The unfair trade practices are listed by the JFTC in a designation notice and are conducts that have a tendency to jeopardize competition on merits. Due to the fact that market power is irrelevant when identifying these practices it is unlikely that by EU standards they would be found infringing article 102 TFEU. Moreover, among them there are a few types of conducts that in EU would depart from the realm of competition law. The abuse of superior bargaining position has been one of the main priorities pursued by the JFTC in the past few years and covers abuses executed by retailers against suppliers. In EU the concept is known as abuse of dominant buyer power and as confirmed by the CJEU can amount to a breach of article 102 TFEU.