Japan: A Competition/Antitrust Overview

Legislative Developments Towards a Green Society, Japan’s Digital Markets Act, and Various Enforcements

Introduction

The Japan Fair Trade Commission (JFTC) continues to enforce Japan’s antitrust law actively, cracking down on cartels and resulting in the largest-ever administrative fines in Japan. The JFTC has also increasingly utilised settlement (aka, commitment) procedures to flexibly address challenges related to cutting-edge issues concerning digital platforms. In terms of legislation, the JFTC has shown interest in Green Transformation (GX) initiatives that contribute to reducing greenhouse gas emissions, and its guidelines have attracted attention among antitrust specialists in Japan and overseas.

This article outlines recent legislative developments and enforcement trends that illustrate how the JFTC’s priorities are evolving.

Legislative developments

Green Guidelines

In March 2023, the JFTC published the “Guidelines Concerning the Activities of Enterprises Toward the Realization of a Green Society under the Antimonopoly Act” (“Green Guidelines”) and revised them in April 2024. According to the JFTC, the Green Guidelines support businesses in achieving a “green society” that balances environmental impact with economic growth.

The JFTC explains its understanding in the Guidelines that they aim to prevent restrictions on innovation in green technologies and thus also enhance transparency and predictability of the Antimonopoly Act (AMA) application for green business practices. The JFTC acknowledges that many business efforts to achieve a green society, including collaborations among competitors, do not restrict fair and free competition and often promote competition by creating new technologies and products, ultimately benefiting consumers through reduced greenhouse gas emissions. For foreign companies seeking to collaborate on green innovation, this guidance would offer both opportunities and regulatory clarity.

The JFTC encourages companies to actively seek consultations with it to clarify its views on applying antitrust law to various green business practices. The JFTC recently announced the conclusion of such a consultation by a group of Japanese companies in the petrochemical industry, to which the JFTC has granted clearance for collaboration.

“Japan’s Digital Markets Act (DMA)” for smartphone software

The “Act on Promotion of Competition for Specified Smartphone Software”, which the JFTC’s commissioner called “Japan’s DMA”, was enacted in 2024 and will be enforced starting from December 2025. This Act will cover specific categories of smartphone software (mobile operating systems, application stores, browsers, and search engines) and, considering the high entry barriers faced by potential competitors, will implement ex-ante regulation to create a competitive environment that can offer consumers greater options in services through a variety of new business activities.

We should note, however, that “Japan’s DMA” focuses specifically on smartphone software and has a very narrow scope compared to the EU DMA, which regulates gatekeepers across various platforms. It is also worth noting that only limited types of conduct will be subject to administrative surcharges, and even for such categories of conduct, companies are allowed to escape from cease-and-desist orders and administrative fines if there are justifications such as privacy and security.

Although the enforcement of “Japan’s DMA” is right around the corner, it is unclear how the JFTC will enforce it.

Enforcement trends

Vigorous enforcement on digital platforms – landmark decision against Google

The JFTC issued a cease-and-desist order against Google LLC. Google required smartphone manufacturers to pre-install its Google Search and browser apps as a condition for licensing Google Play. Furthermore, Google demanded the exclusion of competing search services as a condition for receiving revenue from search ads. The JFTC determined that Google’s actions constituted an anticompetitive tying-like restrictive arrangement.

This case is noteworthy because it marks the first time the JFTC has issued a cease-and-desist order under the Antimonopoly Act against the so-called GAFAM (Google, Amazon, Facebook, Apple, and Microsoft) companies.

Aggressive enforcement against foreign businesses

Cease-and-desist order against ASP Japan

In July 2024, the JFTC issued a cease-and-desist order against ASP Japan G.K., a subsidiary of a US-based company which succeeded the relevant businesses from Johnson & Johnson, determining that the company’s practice of requiring the bundled purchase of its disinfectant with its endoscope washer-disinfector constituted an illegal tying arrangement. The barcode reader installed on the company’s endoscope washer-disinfector was configured to prevent the device from operating unless it scanned a barcode from ASP’s own disinfectant, the JFTC alleged.

In response to the order, the company has filed a lawsuit with the court seeking its revocation.

Cease-and-desist and surcharge order against Harley-Davidson

In September 2025, the JFTC issued a cease-and-desist order and an approximately JPY210 million surcharge payment order against Harley-Davidson Japan K.K., a subsidiary of a US-based company.

According to the press release by the JFTC, Harley-Davidson Japan unilaterally imposed excessively high sales quotas on its authorised dealers and forced them to conduct business in accordance with these contracts. If a dealer failed to meet the quota, their evaluation was lowered, which could jeopardise the continuation of their contract. The JFTC determined that this conduct constituted an abuse of a superior bargaining position.

These JFTC orders clearly demonstrate that the JFTC does not hesitate to enforce the Antimonopoly Act against foreign companies. Accordingly, foreign companies should fully understand this when conducting business in Japan.

Commitment proceedings for single-firm conducts

The JFTC’s commitment procedure, introduced in late 2018, allows investigations to conclude without a formal infringement finding, streamlining the process and aligning it with competition authorities like the EU. The procedure can offer advantages for both the JFTC and investigated companies; it allows the JFTC to pursue a broader range of cases, especially those involving complex competition issues related to digital platforms, and companies under investigation can avoid formal declarations of infringements and administrative fines by the JFTC, which also mitigate risks of follow-on damage suits.

The commitment procedure has been applied to 19 cases to date, meaning that most single cases have been concluded by the JFTC’s commitment decisions rather than formal cease-and-desist orders and administrative fines. The companies that have entered into settlement agreements include foreign companies and their subsidiaries, such as VISA, Amazon Japan, BMW, and Wilson, indicating that the commitment procedure is widely used regardless of the company’s nationality.

Nevertheless, companies considering this route should be aware of potential drawbacks. The JFTC may seek the finding of a more extensive violation than initially suspected, and excessive remedial measures may be required without sufficient evidence to prove the violation. This could lead to prolonged negotiations to design remedial measures. Companies should carefully weigh the potential disadvantages against anticipated advantages before deciding to negotiate a settlement with the JFTC.