Business / Corporate

Japan's FTC demands action from four big contractors who keep cropping up in antitrust cases

JIJI, Kyodo

Fair Trade Commission Chairman Kazuyuki Sugimoto has separately summoned the presidents of four major general contractors to demand action to prevent behavior in violation of antitrust rules within their groups, sources said Wednesday.

The apparently unprecedented move by the FTC followed a spate of antitrust violations by companies linked to the four — Obayashi Corp., Kajima Corp., Taisei Corp. and Shimizu Corp.

At the separate meetings with the general contractors’ presidents earlier this month, Sugimoto urged them to draw up preventive measures and ensure legal compliance by their group workers, the sources said.

He also referred to overseas cases in which parent companies were held responsible for antitrust violations by their subsidiaries, the sources said.

Officials of the four companies admitted that they received the requests from the antitrust watchdog.

“The parent company has a huge responsibility to make sure that companies within its group are serious about compliance,” a spokesperson for Obayashi said.

On July 30, the FTC imposed administrative punishments on eight asphalt mix producers, including those from the four groups, for engaging in a price cartel. They were fined a record ¥40 billion in total.

According to the FTC, there have been at least six antitrust violation cases involving companies of the four groups since 2016.

Recent cases involving the four groups’ subsidiaries and affiliates also include bid-rigging for projects to repair expressways damaged by the March 2011 Great East Japan Earthquake.

Obayashi, Kajima, Taisei and Shimizu declared their resolve to quit bid-rigging in December 2005. But the FTC apparently believes that they have not made enough efforts.

In March 2018, the FTC filed a criminal complaint against the four contractors for their alleged involvement in bid-rigging over contracts related to a Tokyo-Osaka maglev train link.

In October, the Tokyo District Court ordered Obayashi and Shimizu to pay ¥200 million and ¥180 million in fines, respectively, for violating the Antimonopoly Law by colluding with Kajima and Taisei in rigging bids.

Following the ruling, the transport ministry in January ordered Obayashi and Shimizu to stop engaging in new construction projects for 120 days.

A separate trial for Taisei, Kajima and two former executives of the contractors started at the Tokyo District Court in February.

The four contractors had been suspended from bidding for projects ordered by the Economy, Trade and Industry Ministry for four months last year, as well as for those ordered by the land ministry and the Environment Ministry.

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