On November 11, 2008 the Japan Fair Trade Commission (JFTC) filed a criminal accusation with the Prosecutor-General against three major steel sheet companies, Nippon Steel & Sumikin Coated Sheet Corporation, Nisshin Steel Co., Ltd. and Yodogawa Steel Works, Ltd., on suspicions of violating Article 3 of the Antimonopoly Act (“Unreasonable Restraint of Trade”). This the first time in 17 years and the third time since World War II that the JFTC has filed a criminal accusation for a price-fixing cartel.

According to the JFTC, during the period between April 2006 and June 2006, employees of the accused companies agreed to raise the sale price of hot-dip 55-percent aluminum-zinc alloycoated steel sheets and strips shipped after July 1, 2006 by ¥10 per kilogram.

A fourth steel manufacturer, JFE Galvanizing & Coating Co., also participated in the cartel. It was nevertheless excluded from the JFTC’s criminal accusation filing because it applied for leniency (i.e., reduction or exemption of a surcharge) and notified the JFTC of the cartel voluntarily before the JFTC started its compulsory investigation. In this case, the leniency system helped to reveal a cartel. The first to notify the JFTC of a cartel can avoid a criminal accusation by the prosecutor’s office (as a matter of fact) as well as any applicable surcharges by the JFTC (as a matter of law). The JFTC hopes that such treatment will keep the leniency system effective. Although Japan’s law does not specifically provide for such exemption from criminal accusation by the prosecutors office, the prosecutors have also taken a position supporting the JFTC’s policy regarding the leniency system.