As deregulation proceeds, a greater segment of the economy is being ruled by market principles, and this trend will accelerate with the implementation of structural reforms. Here, the Antimonopoly Law, the watchdog of market principles, will play an increasingly important role, and it must be enforced in ways that can win the public's trust.
However, as this author pointed out in Japanese Perspectives on Feb. 17, there are a number of problems in the way the government is enforcing the Antimonopoly Law. The introduction of a system of new penalties under the law, a proposal currently being considered by the Fair Trade Commission, could make matters worse. Another major problem is the widely criticized practice of bid-rigging that has been induced by the public sector. In this practice, bureaucrats prod private-sector firms into arranging their bids for public works projects, then punish them for it and have them pay the fines as well.
First I would like to point out that the proposal to add penalties to the fines already issued under the Antimonopoly Law could lead to dual punishment, which is banned by the Constitution. Article 39 of the Constitution says, "No person shall be held criminally liable for an act which was lawful at the time it was committed, or of which he has been acquitted, nor shall he be placed in double jeopardy."