Japan adopted important changes to the procedure applicable
under its Antimonopoly Law ("AML") on December 7, 2013.
They will come into force within 18 months. The most important
change concerns the procedure for appealing decisions of the Japan
Fair Trade Commission ("JFTC"). Under the current
procedure, appeals against cease and desist orders and surcharge
orders issued by the JFTC must be first heard by the JFTC itself.
After this hearing, the parties can appeal before the Tokyo High
Court. This first appeal was criticized because the JFTC was acting
as both prosecutor and tribunal.
Under the new procedure, parties can appeal orders by the JFTC
directly before the Tokyo District Court. In addition, the
court's review powers have been broadened. Under the current
regime, the court can only review whether the JFTC's decision
is substantially supported by evidence. Under the new
procedure, the court will be able to review whether the JFTC's
decision is correct based on the evidence that the court considers
relevant, as well as new evidence from the parties.
The procedure before the issuance of an order is also modified.
Before the amendments, the JFTC was required to give a defendant
the opportunity to submit its views regarding a draft order. In
practice, this procedure was a mere formality and the JFTC rarely
incorporated the defendant's views in its final decision. Under
the new regime, the JFTC will designate one official who will
oversee the procedure. This official will not be related to the
investigation he must oversee. He will be able to require the
investigation team to explain to the defendants a proposed order,
its findings and evidence supporting the findings. The defendant
will be able to respond to the case team's allegations.
While on paper these amendments seem to ensure more fairness in the
process, it remains to be seen how they will be implemented in
practice.
Consumer group actions for damage claims
Japan has also promulgated its Special Act relating to Civil
Procedures for Recovery of Damages incurred by Group of Consumers
(the "Special Act") on December 11, 2013. The Special Act
will come into force at a later date within three years.
Thus far, consumer groups could seek injunctive relief but not
damages. The Special Act will enable qualified consumer
associations (designated by the Consumers Affairs Agency) to
recover damages on behalf of similarly situated consumers. The
Special Act only applies to damages arising out of consumer
contracts and will likely apply in cases of fraudulent contracts
and coerced consumer contracts. It is therefore possible that this
new procedure will apply in cases where imposition of contractual
terms on a consumer also constitutes a violation of the
Antimonopoly Law.
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