Cartel and Concentration Trend in Japan

Abstract In this paper I will outline the cartel and concentration trend in Japan, using official research work done in this field of economics and politics. In Japan, cartels are prohibited in principle by the Antimonopoly Act (the Act concerning Prohibition of Private Monopoly and Maintenance of Fair Trade of 1947). However, various laws have been enacted to permit exceptions to this act. From the very beginning certain regulated industries as transportation, electric power, and insurance as well as small business cooperatives were exempted. But with the severe business recession experienced in 1952, there came strong pressure for modification of the outright prohibition of cartels. This pressure resulted in several legislation developments. There was enacted in 1952 an Act concerning Temporary Measures for the Stabilization of Specific Medium and Small Enterprises, the predecessor of the present Medium and Small Enterprise Organization Act; the Export Trading Act of 1952, the present Export and Import Trading Act, was a further legislative development of that year. Then, in 1953, when the Antimonopoly Act was revised, provisions permitting the formation of “depression” and “rationalization cartels” were incorporated. They were modeled after those of the West German Government’s Bill against Restraint of Competition of 1951, allowing certain exemptions to the prohibition on restraints of competition. Subsequently, the aforementioned Act concerning Temporary Measures for the Stabilization of Specific Medium and Small Enterprises and the Export Trading Act had been revised almost every year for further strengthening of cartelization, and such so-called rationalization laws as Machine Industry Promotion Temporary Measures Act of 1956 or Electronics Industry Temporary Measures Act of 1957 were enacted.