Introduction to Japan’s Evolving Competition Landscape
Japan’s competition law framework is undergoing significant transformation under new leadership at the Fair Trade Commission. In May 2025, Mr. Eiji Chatani assumed the role of JFTC Chair, bringing fresh enforcement priorities centered on innovation and economic revitalization. Multinational companies, particularly those in technology and manufacturing sectors, must navigate this evolving regulatory environment carefully.
Recent visits by Axinn partners Mike Keeley, Jackie Lem, and counsel Carol Liu to Japan revealed critical insights into the JFTC’s strategic direction. Understanding these developments is essential for businesses operating in Japan’s competitive market, as enforcement patterns signal increased scrutiny of digital platforms while offering favorable treatment for sustainable business practices.
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New JFTC Leadership Under Chair Chatani
Background and Priorities
Chair Chatani represents the fourth consecutive JFTC leader to emerge from Japan’s Ministry of Finance, one of the nation’s most prestigious agencies known for producing exceptional economic policy experts. His appointment signals a strategic shift in Japan’s competition law enforcement approach, with emphasis on breaking free from economic stagnation.
In his inaugural speech, Chair Chatani outlined an ambitious agenda focused on revitalizing Japan’s economy through strategic antitrust enforcement. His deep expertise in economic and financial policy positions him uniquely to address Japan’s competitive challenges while fostering innovation and protecting domestic businesses.
Key Enforcement Priorities for 2025
Intensified Cartel Enforcement
Dawn Raid Operations Resume
Cartel enforcement has emerged as the cornerstone of Chair Chatani’s enforcement strategy, particularly targeting products affecting everyday consumer lives. The September 2025 dawn raids on eight Japanese gasoline retailers marked a significant milestone, representing the JFTC’s first compulsory investigative action in three years since the Tokyo Olympics bid-rigging investigation in 2022.
These enforcement actions targeted suspected collusion in diesel price fixing, demonstrating the JFTC’s commitment to protecting consumers from price manipulation. The resumption of aggressive investigation tactics signals a new era of heightened enforcement vigilance.
Preparedness Requirements for Businesses
US companies with Japanese operations should implement comprehensive dawn raid preparedness protocols. This includes training business and legal departments on best practices, establishing document retention policies, and working with experienced competition law counsel to ensure compliance readiness.
Digital Platform Regulation
Mobile Software Competition Act Implementation
Digital platform regulation occupies a central position in the JFTC’s enforcement agenda. Chair Chatani emphasized the necessity of “strict measures against anti-competitive conduct by digital platform operators,” reflecting global trends in platform regulation.
The Mobile Software Competition Act (MSCA), set for full implementation in December 2025, draws inspiration from the European Union’s Digital Markets Act. This legislation specifically targets Apple and Google, preventing self-preferencing behaviors in app stores, browsers, and payment systems. Violations carry substantial penalties, with fines reaching up to 20 percent of turnover.
Enhanced Technical Capabilities
To strengthen its digital platform oversight, the JFTC is actively recruiting engineers, data analysts, and technology officers. This investment in technical expertise demonstrates the agency’s commitment to sophisticated investigation of complex digital marketplace conduct.
International Cooperation Framework
The JFTC’s July 2025 Digital Cooperation Arrangement with the European Commission establishes coordination mechanisms for MSCA and DMA enforcement. This international collaboration signals the JFTC’s willingness to harmonize enforcement efforts across jurisdictions, creating consistency for multinational platforms.
Small Business Protection Measures
Subcontract Act Amendments
Japan recently amended its Subcontract Act, expanding protections for small and medium enterprises against abuse of superior bargaining positions. The amendments, effective January 2026, broaden the definition of dominant companies subject to regulation and prohibit unilateral payment term impositions without negotiation.
Enforcement Against Dominant Firms
The JFTC’s recent fine against Harley-Davidson’s Japanese subsidiary represents the first penalty for exploitative conduct in 11 years. This enforcement action demonstrates the agency’s renewed commitment to protecting smaller business partners from unfair dealing practices.
Unique Legal Standard
Unlike US antitrust law requiring market power demonstration, Japan’s abuse of dominance framework can establish violations based solely on relative superior bargaining position between parties. This lower threshold creates heightened compliance risks for multinational companies dealing with smaller Japanese partners.
Green Initiative Guidelines
Favorable ESG Treatment
The April 2024 revision of Japan’s Green Guidelines presents a stark contrast to US antitrust agencies’ skepticism toward ESG collaborations. The JFTC’s approach suggests that activities advancing green society goals are “unlikely to pose problems under the Antimonopoly Act most of the time.”
These guidelines direct the JFTC to balance ESG-related procompetitive benefits against potential anticompetitive effects, creating opportunities for sustainable business partnerships. US companies can leverage this favorable regulatory environment for green investments and collaborations in Japan.
Information Exchange Monitoring
Hotel Industry Warning Letters
Information exchange remains a critical enforcement focus, as demonstrated by the JFTC’s May 2025 warning letters to 15 hotel operators. These companies, all trade association members, exchanged competitively sensitive information including occupancy rates, room pricing, revenue metrics, and future booking status.
The JFTC cautioned that such exchanges, when affecting pricing decisions, may facilitate coordinated conduct violating antitrust laws. This enforcement action reinforces the importance of robust compliance programs addressing competitor information sharing.
Implications for Multinational Companies
Strategic Compliance Considerations
Multinational companies face both challenges and opportunities in Japan’s evolving regulatory landscape. Increased scrutiny of digital platforms and heightened protection of local small businesses will likely intensify investigations of large technology firms and dominant market players.
However, Japan’s commitment to economic revitalization creates favorable conditions for business activities aligned with policy goals, particularly investments in innovation and sustainability. Companies should strategically position their Japanese operations to benefit from these opportunities while maintaining rigorous compliance standards.
Practical Recommendations
Organizations should establish comprehensive compliance programs addressing dawn raid preparedness, information exchange protocols, fair dealing with smaller partners, and ESG collaboration frameworks. Regular training and coordination with experienced Japanese competition law counsel will prove essential for navigating this complex regulatory environment.
Conclusion
Japan’s competition law landscape in 2025 presents a dynamic regulatory environment requiring sophisticated compliance strategies. Under Chair Chatani’s leadership, the JFTC is pursuing aggressive enforcement in traditional areas while creating opportunities for sustainable business growth.
Multinational companies must balance compliance vigilance with strategic positioning to capitalize on Japan’s evolving regulatory framework. Success requires understanding the JFTC’s priorities, implementing robust compliance programs, and engaging experienced counsel familiar with Japan’s unique competition law standards.
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