Edited by Fabiana Di Porto and Rupprecht Podszun
Chapter 11: Restraining bargaining power through competition law: superior bargaining position regulation in Japan as compared with the EU
Superior bargaining position (SBP) regulation exercised by the Japan Fair Trade Commission (JFTC) aims at business methods that the JFTC judges as abusive in leveraging bargaining power towards weaker trading partners. This regulation has commonality with the European Commission’s exploitative abuse regulation (based on Art. 102 TFEU), but has been enforced in a considerably different way compared with the EU’s. This chapter, through comparing the Japanese regulation with the EU’s, highlights weakness of the SBP regulation. The weakness emanates from two deficiencies: first, lack of objective standards in identifying unreasonable abuse; second, lack of limitation to targeted enterprises. The JFTC has distinguished SBP from dominant position (or market power), thus identifying SBP whenever the JFTC identifies unreasonable trading terms, effectively transforming the SBP regulation to general regulation against unfair trading terms. This has effectively expanded the role of the JFTC to watching over unfair trading terms, leading to excessive intervention into business methods, at the expense of consumer welfare. The JFTC is advised to emulate the European Commission in minimizing exercise of SBP abuse regulation; at least, through limiting the regulation to instances where SMEs cannot feasibly utilize litigation for resolving their business conflicts with large-scale retailers or producers.
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