Competition Law and Policy in Japan and the EU

Competition Law and Policy in Japan and the EU

Etsuko Kameoka

This exciting new book embarks on a comparative analysis of competition law and policy in Japan and the EU. It provides a clear and carefully researched exposition of the differences between the relevant rules, systems and underlying ideas of the two jurisdictions, together with the relevant historical backgrounds.

Chapter 5: Vertical restraints

Etsuko Kameoka

Subjects: asian studies, asian law, law - academic, asian law, competition and antitrust law, european law


The AMA was adopted under the strong influence of the US, when Japan was occupied by the Allied Occupation Forces. However, the Japanese market featured particular distribution systems uncommon to the US market. Further, the peculiarities of distribution systems in Japan, such as the high density of small retail stores, the relatively limited number of large stores and complex wholesale channels was a longstanding tradition that could not easily be changed. Keiretsu is one of the examples of traditional vertical arrangements in Japan and has long been considered by critics to be problematic (or by supporters to be efficient). The term refers to a business network of companies whose members own stakes in each other as a means of achieving mutual security and the integration of large industrial and banking operations. In some respects, keiretsu are similar to zaibatsu, which were (originally) family-owned corporate groups typical of the pre-World War II economy. Under keiretsu, relations between the companies are rigidly fixed and their commercial transactions are often based on vague conditions without any formal contracts. They sometimes impose unfair conditions on a smaller party. ëProduction keiretsuí take the form of arrangements at a production level between a manufacturer and a supplier of raw materials and components, while ëdistribution keiretsuí is formed, for instance, between a supplier and a distributor. In addition to vague conditions and occasionally unfair practices and trading conditions, keiretsu often employ RPM, exclusive conditions, territorial restrictions, tying and rebates.

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