The Yomiuri Shimbun (Oct. 29, 2012)
FTC chairman's empty seat must be filled--now
The Fair Trade Commission chairman's seat has been empty for more than a month.
The government must submit a proposal to fill this vacancy in the coming extraordinary Diet session and obtain approval from both houses of the Diet to resolve this irregularity.
Kazuhiko Takeshima retired as FTC chairman on Sept. 26 after completing his second five-year term. However, the government did not submit a proposal to fill the vacancy to the ordinary Diet session.
The five-member FTC board now lacks two members as one of the members died before Takeshima retired. It is the first time since the FTC was inaugurated for the board to have only three members.
This means that if a single member is unable to attend a meeting, the FTC will lack a quorum. If this situation continues, it may affect the operations of the commission.
The FTC plays a leading role in keeping competition fair through such activities as clamping down on price cartels, bid rigging and illicit activities of administrative organizations as well as by approving corporate mergers.
Needless to say, the responsibility of the chairman is especially heavy. It is extremely problematic to leave the seat vacant for a prolonged period.
Democratic Party of Japan-led administrations have a bad habit of lightheartedly shelving decisions on important policies and personnel appointments and placing the blame squarely on the divided Diet, in which opposition parties control the House of Councillors. The party should break this habit immediately.
Commission's functions stronger
Recently, the FTC has been steadily strengthening its functions as a "guardian of the market."
Drastic revisions to the Antimonopoly Law gave the FTC authority to launch legally binding investigations. Financial penalties for companies violating the Antimonopoly Law were raised, while a system was adopted to reduce or exempt surcharges on companies voluntarily reporting bid rigging.
Such changes enabled the FTC board to take a more effective carrot-and-stick approach, leading to a number of serious violations being uncovered. The amount of financial penalties imposed on companies reached a record 72 billion yen in fiscal 2010.
Still, illegal business practices show no sign of declining significantly. Bid rigging involving officials of the Land, Infrastructure, Transport and Tourism Ministry and the Defense Ministry were revealed recently.
Also noteworthy is the practice of companies abusing their status to "oppress" subcontractors, such as by demanding lower prices or delaying payment. The public places high hopes on the FTC as a watchdog to prevent illegal practices.
Bigger role in corporate mergers
The FTC's role of approving corporate mergers is also gaining weight as the number of mergers that influence the global market is increasing, due to the rapid globalization of the economy.
The commission recently revised its methods in approving corporate mergers, such as by paying more attention to the global market share of the merging companies as well as simplifying the approval process.
The revision has enabled the FTC to more rapidly complete its examination of huge mergers, such as that between Nippon Steel Corp. and Sumitomo Metal Industries, Ltd. and the management integration of the Tokyo Stock Exchange and the Osaka Securities Exchange.
Considering the importance of the FTC role, its leadership must be returned to good working order as soon as possible.
The Diet also has not yet approved the government's personnel appointments for the Nuclear Regulation Authority and the NHK Board of Governors. It is time to put an end to the prolonged turmoil caused by the Diet's failure to approve the government's appointments, which is the result of political maneuvering.
(From The Yomiuri Shimbun, Oct. 28, 2012)