Competition / Antitrust Law

Commitment Procedures in Japanese Antitrust: Recent Trends and Implications for Tech Platforms

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read
Slide summary: JFTC commitment procedure—legal basis, tech-sector use, 2024 monitoring rules, strategic tips for global firms
TL;DR: Since 2018 Japan’s Antimonopoly Act lets the JFTC close investigations through negotiated commitment procedures. Usage has surged—especially against tech platforms—because it delivers faster remedies without formal violation findings. A 2024 Tokyo court case and new JFTC monitoring rules signal tougher oversight, so global firms should be ready to craft precise, auditable remedy plans.

Table of Contents

  1. Introduction
  2. Understanding Commitment Procedures under the AMA
  3. The Rise of Commitment Procedures in Practice (Post-2018)
  4. Why Commitments in Tech Cases? Pros and Cons
  5. Ensuring Effectiveness: Monitoring and Recent JFTC Enhancements
  6. Commitments in the Broader Regulatory Context
  7. Conclusion

Introduction

Antitrust enforcement in the dynamic digital economy presents unique challenges worldwide. Balancing the need for swift intervention against potentially anti-competitive conduct with the requirements of thorough investigation and due process is a complex task for regulators. In Japan, the Japan Fair Trade Commission (JFTC) has increasingly turned to a specific enforcement tool – "commitment procedures" (kakuyaku tetsuzuki) – particularly in cases involving large technology platforms.

Introduced into the Antimonopoly Act (AMA) effective late 2018, commitment procedures offer a pathway for resolving antitrust concerns through a negotiated settlement between the JFTC and the investigated company. This mechanism allows the JFTC to close a case without a formal finding of violation, provided the company commits to specific remedies designed to address the potential competition issues.

Since their introduction, commitment procedures have become a prominent feature of the JFTC's enforcement landscape, especially in non-cartel cases. Their application to major domestic and international tech platforms has drawn particular attention. This article provides an analysis of commitment procedures under Japan's AMA, examines recent trends in their use (particularly concerning tech platforms, as of mid-2025), discusses the advantages and disadvantages of this approach, and explores the implications for global businesses facing JFTC scrutiny in Japan.

1. Understanding Commitment Procedures under the AMA

Commitment procedures provide an alternative to the JFTC's traditional enforcement routes, namely issuing formal cease and desist orders (haijo sochi meirei) or administrative monetary penalty orders (kachoukin noufu meirei) after finding a definitive violation of the AMA.

  • Legal Basis and Objectives: The procedures were introduced by amendments to the AMA that took effect on December 30, 2018. The primary goals were to:
    • Enable Rapid Resolution: Allow for quicker remedies to restore competition compared to potentially lengthy formal investigations and subsequent litigation if the JFTC's findings are challenged.
    • Increase Efficiency: Permit the JFTC to allocate its resources more effectively, focusing intensive investigations and litigation on the most serious violations (like hard-core cartels, which are generally excluded from commitments) while resolving other cases through negotiated settlements.
    • Promote Voluntary Compliance: Encourage companies under investigation to proactively address competition concerns.
  • The Procedure: The process generally unfolds as follows:
    1. JFTC Investigation: The JFTC conducts an investigation into suspected AMA violations.
    2. JFTC Discretion: If the JFTC believes commitment procedures are an appropriate resolution pathway (considering factors like the nature of the suspected conduct and the possibility of swift restoration of competition), it has the discretion to notify the investigated company in writing that it can apply for commitment approval. There is no right for the company to demand this procedure.
    3. Company Application: The company then has 60 days from receiving the notice to submit a detailed "commitment plan" (kakuyaku keikaku) outlining the specific measures it proposes to take to eliminate the suspected violation and restore competition. This plan is drafted by the company, often after informal discussions with the JFTC.
    4. JFTC Review: The JFTC assesses the submitted plan based on two key criteria:
      • Sufficiency: Are the proposed measures sufficient to eliminate the suspected violation identified by the JFTC?
      • Certainty: Is the plan specific and concrete enough to ensure reliable implementation?
    5. Approval or Rejection: The JFTC decides whether to approve (nintei) or reject the commitment plan. Approval results in the formal closure of the investigation without a finding of an AMA violation. Rejection means the JFTC continues its formal investigation, potentially leading to cease and desist orders or penalties.
  • Legal Effect of Approval: Once a commitment plan is approved:
    • The JFTC cannot issue a cease and desist order or a kachoukin payment order regarding the conduct covered by the commitment plan.
    • The company avoids a formal finding or admission of guilt under the AMA.
    • The commitment plan becomes legally binding on the company.
  • Consequences of Non-Compliance: If the company fails to implement the approved commitments, or if the application was based on false information, the JFTC can revoke (torikeshi) the approval. Revocation reopens the original investigation and allows the JFTC to pursue formal orders and penalties based on the initial suspected conduct. However, there are no specific penalties for the failure to implement the commitments itself, other than the risk of the original case being revived.
  • Comparison with Other Outcomes: Commitments differ from:
    • Cease and Desist Orders: These involve a formal finding of violation and legally mandate specific actions, carrying reputational consequences and potentially forming a basis for private damages claims.
    • Warnings/Cautions: These are issued for conduct suspected of violating the AMA but where formal action isn't deemed necessary; they lack binding legal effect.
    • Investigation Closure (Shinsa Uchikiri): The JFTC may close an investigation without formal action if the company voluntarily takes steps to address concerns. While sometimes publicly announced, these voluntary measures lack the formal, binding nature and JFTC approval inherent in commitment procedures.

2. The Rise of Commitment Procedures in Practice (Post-2018)

Since their introduction, the JFTC has embraced commitment procedures quite actively.

  • Frequency: By mid-2024, the JFTC had approved commitment plans in nearly 20 cases. This significantly outnumbered the formal cease and desist orders issued during the same period for the types of conduct eligible for commitments (primarily non-cartel violations like restrictive practices and abuse of dominance).
  • Types of Conduct: The majority of commitment cases have involved vertical restraints (like resale price maintenance or, more commonly, restrictive conditions in distribution agreements, such as MFN/parity clauses) and abuse of a superior bargaining position. A couple of cases involved suspected private monopolization.
  • Focus on Digital Platforms/Big Tech: A significant subset of these commitment cases has involved major players in the digital economy, reflecting the JFTC's focus on this sector. Notable examples resolved through commitments by mid-2024 include:
    • Rakuten (Oct 2019): Concerning alleged imposition of parity clauses (MFNs) on accommodation providers using its online travel agency (OTA) platform.
    • Amazon Japan (Sep 2020): Concerning alleged abuse of superior bargaining position against suppliers on its e-commerce marketplace (e.g., demanding contributions, requiring acceptance of returns).
    • Booking.com (Mar 2022): Also concerning alleged OTA parity clauses.
    • Expedia (June 2022): Another case concerning alleged OTA parity clauses.
    • Google (Apr 2024): Concerning alleged restrictions imposed on LINE Yahoo (LY Corporation) regarding the use of Google's search advertising distribution technology.

This frequent use in platform cases suggests the JFTC sees commitments as a particularly suitable tool for addressing competition concerns in these complex and rapidly evolving markets.

3. Why Commitments in Tech Cases? Pros and Cons

The JFTC's preference for commitments in platform-related cases likely stems from the perceived advantages of this tool in the tech context, though it also carries potential drawbacks.

3.1. Rationale for Use in the Tech Sector

  • Speed and Timeliness: Digital markets often exhibit network effects and rapid technological change, meaning that anti-competitive conduct can quickly lead to irreversible market tipping. Commitments offer the potential for much faster remedies compared to formal investigations followed by potentially lengthy court appeals, which is crucial for restoring competition effectively in these dynamic environments.
  • Resource Efficiency: Investigating complex conduct by global tech giants demands significant JFTC resources (personnel, technical expertise, economic analysis). Commitments allow the JFTC to resolve cases more efficiently, freeing up resources for other priorities.
  • Tailored and Flexible Remedies(?): In theory, the negotiation process allows for more flexible and tailored remedies than might be possible through standardized formal orders. This could involve specific technical changes, data access provisions, or behavioral commitments suited to the particular platform's operation. (However, ensuring these negotiated remedies are genuinely sufficient remains a challenge).
  • Cooperation and Buy-In: The process relies on the company's voluntary proposal, which can foster greater buy-in and potentially smoother implementation compared to remedies imposed adversarially.

3.2. Potential Drawbacks and Criticisms

Despite the advantages, the use of commitment procedures, especially in high-profile tech cases, faces criticism:

  • Lack of Legal Precedent: Commitment decisions do not involve a formal finding of violation or detailed legal reasoning by the JFTC. This limits the development of clear legal precedent, potentially leaving ambiguity for other companies in the market regarding the JFTC's interpretation of the AMA in novel digital contexts.
  • Transparency Concerns: Compared to formal decisions (which are published with detailed factual findings and legal analysis), the public information released alongside commitment approvals is typically less comprehensive (usually summarizing the alleged conduct and the commitment plan). This can make it difficult for third parties (like affected competitors or consumers) to fully understand the case or potentially use the outcome as a basis for private litigation (e.g., damages claims).
  • Risk of Insufficient Remedies: A major concern is that negotiated commitments might be weaker than remedies the JFTC could have imposed through a formal order, potentially leading to incomplete restoration of competition. The JFTC must carefully assess the "sufficiency" of proposed plans, but the lack of a formal violation finding might limit its bargaining power.
  • Potential for Over-Enforcement/Chilling Effects: Conversely, some worry that companies might agree to commitments for conduct that is not clearly illegal under the AMA simply to avoid the significant cost, uncertainty, and reputational risk associated with a full JFTC investigation and potential litigation. This could lead to companies agreeing to restrictions that go beyond what the law strictly requires.

4. Ensuring Effectiveness: Monitoring and Recent JFTC Enhancements

The success of commitment procedures hinges critically on effective post-approval monitoring to ensure companies fully implement their promises. This is particularly true in complex tech cases involving behavioral or technical remedies. Recognizing this, the JFTC announced significant operational changes in July 2024 aimed at strengthening the monitoring and effectiveness of commitment procedures:

  1. Longer Monitoring Periods: The standard monitoring period for commitments will now be five years or longer, extended from the previous common practice of three years. This reflects the understanding that restoring competition, especially in digital markets, may require sustained effort and observation.
  2. Use of Compulsory Investigation Powers: The JFTC explicitly stated its intention to utilize its formal investigation powers under the AMA (including information requests, onsite inspections under Art. 47, and potential criminal investigation powers under Art. 68) to actively monitor compliance with approved commitment plans. This includes potentially seeking information not just from the committing party but also from third parties like competitors or customers.
  3. Active Use of Monitoring Trustees: The JFTC signaled a policy of actively utilizing independent third-party experts (Monitoring Trustees) to oversee the implementation of commitments, particularly in complex cases requiring specialized technical or market knowledge. The trustee would report compliance progress directly to the JFTC.

These measures indicate a clear recognition by the JFTC that robust monitoring is essential to ensure commitments are not merely symbolic gestures but lead to tangible changes in market behavior. This increased focus on post-commitment oversight is particularly relevant for platform cases where remedies can be intricate.

5. Commitments in the Broader Regulatory Context

The use of commitment procedures under the AMA should also be seen in the context of Japan's evolving regulatory toolkit for digital platforms.

  • Interaction with New Ex-Ante Laws: The new Smartphone Software Competition Promotion Act, directly inspired by the EU's DMA, incorporates its own commitment procedure mechanism (Articles 22-29), mirroring the AMA's system. This suggests commitments are viewed by Japanese policymakers as a valuable tool not only for traditional ex-post antitrust enforcement but also for resolving issues under the new ex-ante regulatory regime targeting digital gatekeepers. How the JFTC utilizes commitments under this new Act will be a key area to watch.
  • Global Alignment: Many major jurisdictions (including the EU and the US, though via different legal mechanisms like consent decrees) employ similar settlement tools in antitrust enforcement. Japan's adoption and active use of commitments align it broadly with this international trend towards negotiated resolutions, offering multinational companies a degree of procedural familiarity, although specific rules and practices differ.

Conclusion

Commitment procedures (kakuyaku tetsuzuki) have rapidly become a central pillar of Japanese antitrust enforcement under the Antimonopoly Act since their introduction in late 2018. Offering a pathway to resolve investigations without a formal finding of violation, they have been particularly favored by the JFTC in cases involving the complex and fast-evolving digital platform sector. Cases involving major global tech companies concerning online travel, e-commerce, and search advertising have already been concluded through this mechanism.

The appeal of commitments lies in their potential for achieving swifter resolutions and conserving enforcement resources compared to lengthy formal proceedings. However, they are not without challenges, particularly concerning the transparency of outcomes, the lack of formal precedent, and the crucial need to ensure that negotiated remedies are genuinely sufficient to restore competition.

The JFTC's recent (July 2024) enhancements to its monitoring practices—extending oversight periods, affirming the use of compulsory powers, and embracing monitoring trustees—signal a commitment to bolstering the effectiveness and credibility of this enforcement tool. Furthermore, the inclusion of similar procedures in the new Smartphone Software Competition Promotion Act underscores the perceived value of commitments in regulating digital gatekeepers in Japan.

For technology platforms and other businesses operating in Japan, commitment procedures represent a significant strategic consideration when facing JFTC scrutiny. They offer a potential avenue to avoid formal sanctions and protracted disputes, but require careful negotiation, a willingness to offer substantial remedies, and strict adherence to the approved plan under potentially enhanced JFTC oversight. As Japan continues to refine its approach to antitrust enforcement in the digital age, commitment procedures are likely to remain a key, albeit carefully scrutinized, instrument in the JFTC's toolkit.