Fair Trade Commission Abandons Regulations on Private Profit Abuse by Family-Owned Business Groups

Guidelines Revision on Accusations
Companies Accused of Bid Rigging
Dismissal of Charges Against Related Parties

The Fair Trade Commission has scrapped the revision of guidelines that would have, in principle, included related parties (owners) when indicting large corporations suspected of preferentially allocating work.

On the 28th, the Fair Trade Commission announced that it had revised the "Guidelines of the Fair Trade Commission on the Indictment of Violations of the Monopoly Regulation and Fair Trade Act, etc." and that the revision would take effect from that day. The revision was finalized at a plenary meeting on the 10th after a process of collecting opinions through an administrative notice in October.

The revised guidelines added "the ripple effect on the market" and "the extent of damage caused to small and medium-sized enterprises or consumers" as considerations in deciding whether to indict.

Among the existing considerations, the phrase "whether it is unrelated to impacts on life, health, and safety" was revised to "impacts on life, health, and safety" due to concerns that the original wording could only be used as a reason not to indict.

Regarding "cooperation with investigation," it was supplemented to "cooperation with investigation and deliberation" in recognition that cooperation is considered not only during the Fair Trade Commission's investigation phase but also until the deliberation is completed.

The provision that would have allowed related parties to be indicted in principle alongside companies suspected of preferentially allocating work was scrapped. The originally proposed administrative notice included indicting related parties who directed or were involved in the private interest appropriation acts of corporations with serious legal violations, but this was withdrawn in consideration of concerns from various sectors.

The Fair Trade Commission plans to achieve the intended purpose through law enforcement rather than revising the guidelines. The Commission stated, "In the future, when deciding whether to indict related parties who directed or were involved in private interest appropriation acts, we will comprehensively consider all evidence in accordance with the intent of relevant precedents."

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