1. Digital platforms significantly benefit society by providing services that never previously existed. However, per competition authorities around the world, including the Japan Fair Trade Commission (JFTC), the potential for abusive practices presents a serious threat to competition. [1] Such problems arise when the platform has market power, which makes vigorous merger regulation critical. However, mergers in the digital sector can cause an unprecedented anticompetitive effect, which is not easy to assess. 2. This article examines three JFTC merger cases and discusses the lack of necessary resources for the JFTC to carry out its work. I also argue that the typical tools provided for merger regulations under the Antimonopoly Act (AMA) [2] may not be adequate and explore whether the
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INTERNATIONAL: JAPAN - MERGERS - DIGITAL PLATFORMS - NETWORK EFFECTS
Japan: Digital platform mergers and the Antimonopoly Act
A merger involving a digital platform can cause unprecedented anticompetitive effects, which presents challenges for the Japan Fair Trade Commission (JFTC). This article examines three digital platform merger cases reviewed by the JFTC, namely, Ultmarc/M3, ZHD (SoftBank)/LINE, and Google/Fitbit. These cases are important as they demonstrate how the merger guidelines, amended in 2019, operate. They also show that although the JFTC approaches theories of harm and considers the network effect, data, and other relevant factors appropriately in most cases, it still lacks resources to carry out the assessment. There is also an urgent need to make the examination procedures more accessible to third parties. Given the difficulties of evaluating the competitive effect of a fast-evolving digital market, the JFTC’s lack of authority to re-examine a merger ex post is also an issue. Although it has never been applied, the Antimonopoly Act includes provisions related to a monopolistic situation that enable the JFTC to issue an order to restore competition in a flexible manner, which could be a useful remedy.
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