GAL COMPETITION PROJECT JAPAN Institutional Performance Norms Harry First and Tadashi Shiraishi February 5, 2011

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3 SIZE OF COMPETITION AUTHORITIES Source: JFTC, For Fair and Free Market Competition 26 (July 2010).

4 OPERATIONAL EFFICIENCY High level of activity High level of activity Time for adjudicating cases: 2-5 years Time for adjudicating cases: 2-5 years Merger reviews Merger reviews informal pre-merger consultations informal pre-merger consultations Unfair trade practices Unfair trade practices Abuse of Superior Bargaining Position Task Force Abuse of Superior Bargaining Position Task Force policing unjust low prices policing unjust low prices Consultations: 3000 informal (FY 2009) Consultations: 3000 informal (FY 2009)

5 EXPERTISE FTC Chairman and Commissioners FTC Chairman and Commissioners not required to have competition law experience not required to have competition law experience Chairman generally former MOF bureaucrat Chairman generally former MOF bureaucrat Staff Staff career employees career employees almost no trained lawyers or economists almost no trained lawyers or economists Hearing Examiners Hearing Examiners 2 of 6 JFTC employees 2 of 6 JFTC employees

6 TRANSPARENCY Guidelines: high number Guidelines: high number Declinations Declinations high number of formal complaints high number of formal complaints Consultations Consultations low transparency low transparency some merger reviews some merger reviews Public awareness Public awareness JFTC weekly press conferences JFTC weekly press conferences

7 ACCOUNTABILITY Data availability Data availability Diet Diet budget budget appointments appointments reporting reporting legislative controls: amendments to AMA legislative controls: amendments to AMA Courts Courts low level of judicial review low level of judicial review

8 RULE OF LAW Importance of Guidelines Importance of Guidelines Availability of judicial review Availability of judicial review But: informal consultations But: informal consultations Political pressures Political pressures

9 FLASHPOINTS Transparency Transparency better articulation of reasons in close cases better articulation of reasons in close cases Expertise Expertise trained economists trained economists appointment and role of Commissioners appointment and role of Commissioners Use of resources Use of resources extensive guidance function extensive guidance function protecting small business protecting small business