2. Business Model Legality/ Regulatory Approval Investigation

Q4 (Antimonopoly Law and Discount Sales)

In selling goods at a discount, how should we judge whether or not this is dumping under the Antimonopoly Act?

Under the Antimonopoly Act, dumping is “without justifiable grounds, supplying goods or services continuously for consideration which is excessively below the cost required for the supply, thereby being likely to cause difficulties to the business activities of other companies”. Fundamentally, it is limited to cases where a company continuously sells at a price significantly below cost to affect a competitor’s business. Cases where there are special circumstances that justify the discount, such as price reductions based on market conditions or for raw foods or damaged goods, are outside the scope of the regulation.

For further details, please see the Japan Fair Trade Commission’s “Guidelines Concerning Unjust Low Price Sales under the Antimonopoly Act”.

(Posted: January 27, 2012)