On December 12, 2017, Japan's Supreme Court (Third Petty Bench) issued a decision that, for the first time, recognized the extraterritorial application of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade ("Antimonopoly Act"). This was the final appeal in a case in which the Japan Fair Trade Commission ("JFTC") had fined a manufacturer and seller of cathode ray tubes ("CRT Manufacturer") for its participation in a price-fixing cartel in Southeast Asian countries that fixed the price of CRTs sold to Japanese manufacturers and sellers of televisions ("Japanese Manufacturers").
The CRT Manufacturer appellant claimed that the Antimonopoly Act did not apply to the cartel because foreign subsidiaries of the Japanese Manufacturers purchased the CRTs outside of Japan and because the agreements were made outside of Japan. However, the Supreme Court held that even if a price-fixing cartel is established outside of Japan, if the cartel damages the competitive functioning of the domestic Japanese market, then this would constitute a violation of free competition in Japan, and so the Antimonopoly Act would apply. The Supreme Court ruled that the Japanese Manufacturers and their foreign subsidiaries could be considered to have purchased the CRTs together, and that therefore the cartel in this case damaged the competitive functioning of the market of transactions involving the Japanese Manufacturers. The Supreme Court rejected the appellant's claim and thus recognized the extraterritorial application of the Antimonopoly Act.
The decision upheld the JFTC's position that the Antimonopoly Act applies where illegal conduct that takes place outside of Japan has effects on the Japanese market.