On February 28, 2007, the JFTC filed criminal accusations with the Prosecutor-General of Japan against executives of five so-called “super general contractors” for allegedly rigging bids on subway construction projects awarded by the city of Nagoya. Authorities have confirmed that the executives charged were from Obayashi-gumi Co., Kajima Corp, Shimiz Corp., Okumura-gumi Co. and Maeda Construction Co. Under Japan’s Antimonopoly Act, criminal charges may be imposed against any person who effects an unreasonable restraint of trade including bid rigging.

According to a statement by the JFTC’s Secretary-General, the bid-rigging charges resulted from the agency’s new authority to investigate criminal antitrust violations. The Secretary-General further credited the JFTC’s investigative authority with increasing prosecutions of cartel and bid-rigging cases. Such prosecutions had averaged approximately one case every two years prior to 2005, when the investigative authority was granted; in 2007, two such cases have already been brought.

Two provisions of the Antimonopoly Act govern penalties to corporate entities and their executives for antitrust violations. The san-batsu or triple penalty provision penalizes the executives of a business entity who fail to take necessary measures to prevent antitrust violations, while the ryo-batsu or double penalty provision penalizes the company as well as the responsible executives. The san-batsu provision has never been applied, and the JFTC did not seek to apply it in this case. The JFTC’s hesitation to invoke the san-batsu provision is likely due to the difficulty in proving that a company’s executive failed to take necessary measures to prevent the violation.