A private advisory body to the chief Cabinet secretary has recommended strengthening the Antimonopoly Law. Such a move that will benefit consumers and businesses — by assuring the supply of good-quality products and services at reasonable prices — is welcome. The Fair Trade Commission and the ruling coalition must work out effective measures to eradicate bid rigging, cartel formation and other illegal practices. They plan to submit a revision bill to the Diet’s ordinary session next year.

The general approach put forward by the advisory body is to increase surcharges applied to business practices that violate the law. Although the body does not specify how much and when surcharges should be raised, it says that the increase should be high enough to deter illegal business practices. In 2006, when a revision of the Antimonopoly Law went into force, the surcharge levied against large companies was raised from 6 percent to 10 percent of the sales value of products or services related to illegal practices.

Nippon Keidanren (Japan Business Federation), the nation’s largest business lobby, demands an end to the imposition of two-pronged fines — a criminal fine and a surcharge — for violating companies, but the advisory body takes the position that combining both penalties is effective in preventing market distortion. In the same vein, it also suggests ending the present practice of subtracting half of the amount of a fine from a surcharge when punishing a violating company.

The advisory body has also proposed imposing a surcharge on companies that try to secure a monopolistic position in a market by preventing other companies from entering the market through such means as paying rebates to business partners and selling products or services below cost.

The advisory body supports the present system in which the FTC serves as both prosecutor and judge in proceedings of cases violating the Antimonopoly Law. The FTC must ensure transparency in its handling of such cases all the more; otherwise, the public’s trust in the commission will be lost.

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