Newsletter
SMES MAY SET PRICES JOINTLY UNDER CERTAIN CONDITIONS
In principle, the FTL prohibits concerted action in restraint of competition. However, under Ar-ticle 14 Item 7 of the law, small and me-dium-sized enterprises (SMEs) may exception-ally be granted permission to engage in con-certed action in order to enhance operating effi-ciency or competitiveness, on condition that such action is beneficial to the economy as a whole and in the public interest.
The FTC recently amended the Principles for the Assessment of Concerted Pricing by Small or Medium-sized Enterprises to be Approved as an Exception. The definition of an SME adopted by the FTC in the assessment principles is largely the same as that applied by the Ministry of Economic Affairs. Under the assessment princi-ples, the FTC may grant SMEs permission to set uniform prices for goods they produce or ser-vices they provide if such practice is in con-sumers' interests and not harmful to fair compe-tition, and if the firms concerned have obtained the written consent of organizations representing their trading counterparts. The FTC expressed the view that in practice, in a situation of in-adequate transparency of information in the trading practices of many SMEs, uniform pricing is in fact simple and advantageous for consumers. At the same time, by requiring SMEs to obtain the consent of customers' representative organi-zations, the FTC has given consumers a bar-gaining chip for collective price negotiations, which is conducive to upholding consumers' in-terests.