Japan adopted important changes to the procedure applicable under its Antimonopoly Law ("AML") on December 7, 2013. They will come into force within 18 months. The most important change concerns the procedure for appealing decisions of the Japan Fair Trade Commission ("JFTC"). Under the current procedure, appeals against cease and desist orders and surcharge orders issued by the JFTC must be first heard by the JFTC itself. After this hearing, the parties can appeal before the Tokyo High Court. This first appeal was criticized because the JFTC was acting as both prosecutor and tribunal.

Under the new procedure, parties can appeal orders by the JFTC directly before the Tokyo District Court. In addition, the court's review powers have been broadened. Under the current regime, the court can only review whether the JFTC's decision is substantially supported by evidence.  Under the new procedure, the court will be able to review whether the JFTC's decision is correct based on the evidence that the court considers relevant, as well as new evidence from the parties.

The procedure before the issuance of an order is also modified. Before the amendments, the JFTC was required to give a defendant the opportunity to submit its views regarding a draft order. In practice, this procedure was a mere formality and the JFTC rarely incorporated the defendant's views in its final decision. Under the new regime, the JFTC will designate one official who will oversee the procedure. This official will not be related to the investigation he must oversee. He will be able to require the investigation team to explain to the defendants a proposed order, its findings and evidence supporting the findings. The defendant will be able to respond to the case team's allegations.

While on paper these amendments seem to ensure more fairness in the process, it remains to be seen how they will be implemented in practice.

Consumer group actions for damage claims

Japan has also promulgated its Special Act relating to Civil Procedures for Recovery of Damages incurred by Group of Consumers (the "Special Act") on December 11, 2013. The Special Act will come into force at a later date within three years.

Thus far, consumer groups could seek injunctive relief but not damages. The Special Act will enable qualified consumer associations (designated by the Consumers Affairs Agency) to recover damages on behalf of similarly situated consumers. The Special Act only applies to damages arising out of consumer contracts and will likely apply in cases of fraudulent contracts and coerced consumer contracts. It is therefore possible that this new procedure will apply in cases where imposition of contractual terms on a consumer also constitutes a violation of the Antimonopoly Law.

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