Japanese lawmakers, JFTC edge towards agreement on antitrust penalty review

13 April 2017 5:46pm

11 April 2017. By Sachiko Sakamaki and Toko Sekiguchi.

Lawmakers from Japan's ruling Liberal Democratic Party have launched a final push to expand companies' defense rights in antitrust investigations, putting them at odds with the Japan Fair Trade Commission, MLex has learned.

The move by the LDP comes as a regulator's panel prepares to announce its final proposals on the country's antitrust penalty system later this month.

Yoshiaki Harada, chief of the LDP's competition policy research group, told MLex that the party's desire to expand corporate defense rights in antitrust investigations was likely to be reflected to some degree in the final report the panel is preparing. That report is likely to recommend that the regulator be given the flexibility to determine the size of fines according to the extent to which companies cooperate with investigations.

The biggest source of disagreement between the politicians and the regulator concerns the defense rights of companies suspected of antitrust violations. Harada and other legislators say Japan's weak defense rights — embodied in practices such a ban on note-taking and lawyers during questioning, and a lack of attorney-client privilege — are out of step with international standards.

"[Investigation] procedures must become more transparent and democratic," said Harada in an interview today, adding that the ban on note-taking during interrogations may be eased.

A draft report on proposals presented to the panel in January said that additional defense rights were unnecessary as employees being questioned could take notes and contact their lawyers during breaks. Allowing more defense rights would undermine the regulator's ability to unearth the truth, the report said.

Harada's group supports the general direction of JFTC's expert panel, which has suggested granting the regulator some discretion to determine the level of penalties according to the degree of cooperation shown by companies, and increasing the size of fines to bring them more into line with those in other jurisdictions.

A group of LDP lawmakers are demanding an urgent expansion of defense rights in antitrust probes to allow Japanese employees access to their lawyers, as is granted in other countries.

Harada said he shared their view that more defense rights would contribute to effective fact finding.

He said the LDP was trying now to iron out its differences with the JFTC to ease the legislative process for amendments to the Antimonopoly Act, which are likely to be submitted to parliament next year. Negotiations between the party and the watchdog over wording are in their final stages before the JFTC panel releases its final report, sanctioned by the lawmakers.

Joh Sung-Wook Interview