Abusive Practices in Competition Law
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Abusive Practices in Competition Law

Edited by Fabiana Di Porto and Rupprecht Podszun

Abusive Practices in Competition Law tackles the difficult questions presented to competition lawyers and economists regarding abusive practices: where and when is the red line crossed in competitive advances? When is a company explicitly dominant? How do you handle those who hold superior bargaining power over others but are not classed as dominant?
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Chapter 11: Restraining bargaining power through competition law: superior bargaining position regulation in Japan as compared with the EU

Toshiaki Takigawa

Abstract

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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