The Japan Fair Trade Commission (JFTC) has adopted amendments to its “Guidelines on the Application of the Anti-Monopoly Act to Reviewing Business Combination” (the Merger Guidelines), which are designed to improve the transparency and predictability of the merger review process and to reduce delays caused by the agency’s review. Among the notable changes to the Merger Guidelines is a new test for determining the degree of market concentration posed by a merger or acquisition. The JFTC will now measure market concentration according to the Herfindahl-Hirschman Index and place less emphasis on the parties’ respective market shares. In addition, the amended Merger Guidelines allow the JFTC to look beyond Japan when determining the relevant geographic market if competition from foreign suppliers affects prices in Japan. The JFTC may now consider foreign markets and competitors and, where appropriate, define markets to include other parts of Asia or the world.

In conjunction with its amended Merger Guidelines, the JFTC updated its “Policies of Dealing with Prior Consultation Regarding Business Combination Plan” (the Pre-Consultation Notification Plan). The preconsultation process allows parties to seek an unofficial opinion on a proposed merger or consolidation, whether or not they are required by Japan’s Anti-Monopoly Act to file a formal premerger notification. The revised Pre-Consultation Notification Plan clarifies the procedures for applying for pre-consultation and the information required by the JFTC.