VZCZCXRO4268
RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #2412/01 2930454
ZNR UUUUU ZZH
R 200454Z OCT 09
FM AMEMBASSY TOKYO
TO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAWJA/JUSTICE DEPT WASHDC
RUEHC/SECSTATE WASHDC 6916
INFO RUEHFK/AMCONSUL FUKUOKA 6976
RUEHNAG/AMCONSUL NAGOYA 4246
RUEHNH/AMCONSUL NAHA 9331
RUEHOK/AMCONSUL OSAKA KOBE 0794
RUEHKSO/AMCONSUL SAPPORO 7488

UNCLAS SECTION 01 OF 02 TOKYO 002412 
 
SENSITIVE 
SIPDIS 
 
STATE FOR E, EEB, EAP/EP AND EAP/J 
NSC FOR JIM LOI 
USTR FOR WENDY CUTLER AND MICHAEL BEEMAN 
STATE PAS TO DOJ STUART CHEMTOB AND FTC RANDOPH TRITELL AND 
DEIRDRE SHANAHAN 
 
E.O. 12958: N/A 
TAGS: ECIN ECON ETRD KJUS JA
SUBJECT: JAPAN: NEW ADMINISTRATION TO SPUR CHANGE IN 
COMPETITION POLICY? 
 
¶1. (SBU) SUMMARY: Japan Fair Trade Commission (JFTC) Chairman 
Takeshima suggests that the Democratic Party of Japan (DPJ) 
is more friendly to the JFTC and antitrust policy than the 
outgoing Liberal Democratic Party, but how such influence may 
manifest itself is not yet fully apparent.  As an independent 
commission, the JFTC is relatively less affected by the 
change of government compared to other ministries and 
agencies.  The JFTC is reviewing its current administrative 
hearing system for contesting JFTC orders, and JFTC Chairman 
Kazuhiko Takeshima says it will be abolished in the near 
term.  The scope of such abolition, however, remains unclear. 
 END SUMMARY. 
 
¶2. (SBU) Chairman Takeshima suggested that the DPJ is more 
friendly to the JFTC as an agency than the LDP during a 
September 29 call by Ambassador Roos.  He cited the DPJ's 
strong support from middle class voters, who believe in 
competition policy, unlike the companies in construction and 
other fields supporting the LDP, some of which engage in 
bid-rigging. 
 
¶3. (SBU) Chairman Takeshima said he expects Japan's 
Antimonopoly Act (AMA) to be revised to abolish the current 
administrative hearing system for contesting JFTC orders. 
The business and legal communities have long advocated 
abolition, arguing that challenging JFTC orders in court 
provides greater due process.  The precise scope of 
abolition, however, remains unclear.  We understand from 
reliable contacts that the Chairman prefers sweeping 
abolition, but that serious questions exist regarding whether 
the courts are willing and prepared to handle cases other 
than cartels.  Concern also exists that retailers of 
gasoline, liquor, consumer electronics, and other interests 
likely to be affected by decisions concerning unfair trade 
practices, may exert pressure on the DPJ to retain the 
present authority of the JFTC, which they believe they can 
influence unlike any court.  The JFTC has been conducting a 
complete examination of the administrative hearing system 
relating to cartels, mergers and acquisitions, among other 
AMA violations.  Takeshima himself did not specify the extent 
of any abolition, and JFTC staff are not commenting on what 
the final decision will be.  Abolition would require revision 
of the AMA itself, and is not expected until 2010. 
 
¶4. (SBU) Experts suggest that the electoral victory of the 
DPJ, which has promised to abolish the administrative hearing 
system, will spur change.  Professor Masahiro Murakami of 
Hitotsubashi University, for example, told emboff that he 
expects forthcoming abolition to cover all cases of AMA 
violations, not just cartels.   Noting the JFTC's recent 
order against Qualcomm, Murakami highlighted how, 
particularly in high-profile cases, allowing companies to 
challenge JFTC orders in court is more fair than the present 
system.  It is highly unlikely the very body that is 
prosecuting an order will reverse an order once issued, he 
emphasized.  The embassy has identified three instances where 
the JFTC has reversed an earlier order in recent decades. 
Although Murakami's view is widely shared, not all experts 
concur.  Professor Jiro Tamura of Keio University suggested 
to emboff that, in view of concerns about the courts' 
handling of non-cartel cases, it is possible to envision a 
compromise solution under which the administrative hearing 
system would be abolished for cartels only.  Similarly, 
former JFTC Secretary-General Akinori Uesugi told emboff he 
believes companies will, in practice, find themselves in a 
disadvantageous position when challenging a JFTC order in 
court. 
 
¶5. (SBU) In contrast with many Japanese ministries and 
agencies, the JFTC has been relatively unaffected by the 
recent change of administration.  Chairman Takeshima's term 
does not expire until 2012, and JFTC staff continue to work 
on projects underway.  JFTC staff have confirmed, for 
example, that AMA amendments concerning exclusionary 
monopolization will become effective in January 2010 and that 
they are drafting the final guidelines, which they plan to 
release as soon as possible.  They did not give a specific 
date, but reaffirmed that it will be well ahead of when the 
 
TOKYO 00002412  002 OF 002 
 
 
revised law becomes effective.  We understand the JFTC 
received about 40 public comments, including a detailed 
submission by the American Chamber of Commerce in Japan. 
ROOS