Main Developments in Competition Law and Policy by 2024 – Japan

Intro

The year 2024 witnessed significant legislative developments and active enforcement of the Antimonopoly Act (“AMA”) by the Japan Fair Trade Commission (“JFTC”). This year saw a greater focus on digital markets, as well as legislative efforts aimed at major platform operators. These efforts reflect broader global trends aimed at regulating gatekeeping behavior and ensuring fair competition. This blog entry is an overview of these developments.

Legislative Developments

One of the notable legal reforms in 2024 was the enactment of the Act on Ensuring Proper Transactions Involving Specified Entrusted Business Operators (popularly known as the “Freelance Act”). This legislation addresses the long-standing concern that freelancers and independent contractors, such as gig workers, fall into a regulatory void. JFTC Subcontract Act Overview) to various commercial relationships, but neither instrument fully protects individuals who provide specialized services without backing from a traditional employer-employee setup. JFTC Subcontract Law Overview

). Although both instruments are used to protect various commercial relationships, they do not fully protect individuals who provide specialized service without the backing of a traditional employer and employee setup. Freelancers had few legal options to challenge late payments, unilateral changes in terms, or exploitative clauses. The Subcontract Act is aimed at “main subcontracting entrepreneur” and “subcontractors”, especially in manufacturing and certain service industries. The Freelance Act seeks to provide robust legal protections for these workers. The Freelance Act aims to clarify the rights and obligations of commissioning parties and freelancers, imposing requirements on transparency, timely payments, and procedures for dispute resolution.

In tandem with the Freelance Act, the JFTC published revised guidelines that illustrate how the AMA’s prohibition of unfair trade practices (such as abuse of superior bargaining position) can apply in freelance transactions (cf. JFTC Report of 19 January 2024

, and JFTC Revised Guideline, 18 October 2024). The JFTC Report provides case studies on potential abuses. The updated guidelines also provide a transparent framework for fair contracts, payment timelines and minimum disclosure standards. e-Gov database : also known as the “Smartphone Competition Promotion Law”. This statute, which is partially inspired by the EU’s Digital Markets Act (Digital Markets Act), addresses transparency and fairness of app store and mobile platform transaction. The new law requires platform operators who control major app stores to disclose how they rank, feature, and charge fees or commissions. Inspired by the principle of preventing self-preferencing–where a platform might give unfair advantage to its own services–Japan’s approach focuses on ensuring a level playing field for domestic and foreign developers alike.

The new law works in concert with the Act on Improving Transparency and Fairness of Digital Platforms (the “Transparency Act”) to promote fair and free competition in specific markets highly affected by innovations. (cf. Japanese Law Translation).

These legislative changes signal Japan’s growing willingness to address digital gatekeeping issues proactively. The Smartphone Competition Promotion Law, while narrower than EU’s DMA (Digital Market Act), reflects the JFTC’s and other authorities’ policy to protect smaller developers and preserve choice for consumers in app ecosystems. In 2024 enforcement would focus on cartels and private monopolization. Vertical restraints, tying agreements, and merger controls. In addition, the JFTC took action against alleged abuses of superior bargaining position, warning both large corporations and trade associations of the potential harm to fair market competition.

Cartels and Bid-Rigging

Chubu Electric Power Co., Inc. and its affiliate, Chubu Electric Power Miraiz Co., Inc., were ordered cease-and-desist and surcharges by JFTC regarding electricity price-fixing (cf. JFTC Press release, 4 March 2024

). In October 2024, an insurance cartel that specialized in non-life policies led to cease-and desist orders and surcharges. JFTC Press release, 31 October 2024

. The JFTC also intervened with other collusive practices, including woodworking drill manufacturers. JFTC Press release, 28 March 2024

). Municipal school lunch bidders from Nagoya. JFTC Press release, 22 May 2024

) and LP Gas valve suppliers (cf. JFTC Press Release, 27 June 2024

).This case highlights the JFTC’s resolve to maintain open competition in vital infrastructure sectors, an area of ongoing reform since the partial deregulation of Japan’s energy markets in the mid-2010s. Private MonopolizationPrivate monopolization refers to conduct by a single firm (or a small group) that excludes or controls another enterprise’s business, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade. In 2024, the most high-profile case was the Google LLC case.Notably, the JFTC approved a commitment plan by Google LLC to resolve concerns over potential private monopolization in the digital sector (cf. JFTC Press release, 22 April 2024

). Under the plan, Google revised its contractual provisions, ensuring that third parties (including Yahoo Japan) could offer competing services without undue restrictions.

Vertical Restraints

Early in 2024, IBJ Corporation, which provides a marriage agency network, faced suspicions of foreclosing users from other competitive networks (cf. JFTC Press release, 22 January 2024

). The JFTC approved a commitment plan for the company, focusing on open access to competitors. In May, it was found that fishery cooperatives within the Ariake Sea Region had restricted “outside-of-network seaweed sales” (cf. JFTC Press releases, 15 May 2024, and another release, 15 May

) prompted cease-and-desist order. NISSIN FOOD CO., LTD. also received a warning. JFTC Press release, 22 August 2024

). Seki Furniture Co., Ltd. also faced enforcement for similar concerns regarding RPM (cf. JFTC Press Release, 19 December 2024

). TyingThere are two cases of tying in 2024, and interestingly, these are all related to modifications of the product design. First, ASP Japan G.K. had to stop tying phtharal to its automated endoscope reprocessors. This was done by integrating a code matrix system on disinfectant bottles as well as the reprocessors. JFTC Press Release, 26 July 2024). In a private lawsuit, Ecorica alleged that Canon’s modification to its ink cartridge was an illegal tie-in of a genuine Canon ink cartridge. The Japanese Supreme Court is currently hearing an appeal. An appeal is pending before the Japanese Supreme Court.

Merger Control

Merger reviews remain a central function of the JFTC, reflecting Japan’s global integration and the government’s desire to foster efficient market structures.The JFTC concluded its review of Korean Air’s share acquisition of Asiana Airlines in January 2024 (cf. JFTC Press release, 31 January 2024[*]). The JFTC endorsed remedies that addressed international concerns about competition. Other notable cases

A major case concerning the abuse of a superior position by platform was pending for many years. In 2024, the High Court delivered its ruling. A business operator who is dominant over its trading partners and uses that position to commit improper acts, such as unjustly reducing payments or forcing returns, may violate the AMA. The Tokyo High Court concluded that Tabelog, a major restaurant review platform, had not abused a superior bargaining position by adjusting rating algorithms.

The JFTC warned the Nippon Professional Baseball (NPB) about restrictive rules on player agents (cf. JFTC Press release, 19 September 2024

). The JFTC stated that restrictions on player agents could limit athletes bargaining power and hinder contract negotiations. Although no fines were levied, the warning spotlights the Commission’s readiness to examine pro sports leagues for potential labor market constraints.Finally, MC Data Plus, Inc. faced cease-and-desist orders for interfering with data portability in cloud-based labor safety services (cf. JFTC Press release, 24 December 2024

. MC Data Plus was found to have prevented users from exporting crucial data to rival service providers. The JFTC’s order reaffirmed that data portability is increasingly viewed as central to fair competition.

Other Activities of the JFTC

Generative AI ReportIn October 2024, the JFTC released a report on generative AI, contemplating potential competition concerns in this rapidly evolving sphere (cf. JFTC Press release, 2 October 2024

. The JFTC, analyzing the rapid adoption and use of large language models, image-generation tools and algorithmic collusion, analyzed the potential data hoarding, algorithmic collaboration and locked-in users. This forward-looking document could pave the way for new guidelines on AI governance under the AMA.

Green Society Guidelines

Earlier in April, the Commission revised its guidance toward realizing Green Society (cf. JFTC Press release, 24 April 202024

). The revised guidelines clarify JFTC’s attitude to eco-focused collaborative efforts under the AMA. The guidelines confirm that sustainability initiatives such as joint R&D and standard-setting may be allowed, if they bring real environmental benefits without restricting competition. Market Study on Ensuring Fair Deals to Support Creators

At the beginning of 2024, the JFTC conducted a study on the transactions between performers and entertainment agencies in the music and broadcasting industry to promote fair and open competition. JFTC Press release, 24 April 2024

). The study found that certain conduct in transactions between entertainers and performers, broadcasters and entertainers/performers and record companies could violate the AMA. The JFTC’s enforcement took a strong stance against cartels in infrastructure and financial services. It also addressed private monopolization through Google’s commitment plan in order to avoid lengthy litigation. Vertical restraints, tying and other cases present difficult challenges. For example, proving the market foreclosure of a contract that restricts “out of network” or design changes of products. As seen in the cases of Daishi Bank/Hokuetsu Bank and Korean Air/Asiana Airlines, merger reviews remain crucial. This highlights the Commission’s ongoing supervision of post-integration behavior. Clarifications were also made on algorithm changes (Tabelog), labor-market restraints and data portability. Meanwhile, broader policy efforts–generative AI guidance, revised Green Society Guidelines, and a new portal for entertainment contracts–underscore the JFTC’s forward-looking approach. As 2025 approaches Japan is ready to refine its competition laws further and maintain a reputable reputation as an innovative regulatory body in a rapidly changing global economy. No other conflicts of interest have been declared.

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