The Act against Unjustifiable Premiums and Misleading Representations was reformed in 2009 creating a new legal framework that has moved away from regulations focusing on “limitation on fair competition” by misleading representations etc., (special rules for the Anti-Monopoly Act) and has instead adopted regulations that focus on a limitation on the “options” of general consumers. Although the scope of the regulation was not substantially changed in this amendment, the governing agency was changed from the Fair Trade Commission to the Consumer Affairs Agency and the focus shifted from securement of fair competition to protection of consumers.
Furthermore, the Act underwent additional reform when it was amended twice in 2014 to include provisions regarding necessary measures to be taken by business operators and strengthening supervision obligations by the Consumer Affairs Agency. As a result, administrative monetary penalties against business operators who violate the Act were introduced and come into force in 2016. Therefore, with respect to misleading representations, companies bear the risk of strict inspection by the Consumer Affairs Agency, the burden of costs to respond to such an inspection, risk of administrative monetary penalty and risk of litigation by consumers who suffer damage from the misleading representations (as mentioned in the Consumer Litigation section, there is a risk that a Japanese Class Action will be initiated by a consumer organization).
Securement of fair competition is still one of the purposes of the regulations with respect to misleading representations and the Act is not a consumer protection act alone. Lawyers at Nishimura & Asahi have a deep knowledge of consumer protection, including consumer litigation, and specialize in the securement of fair competition with an exceptional track record in corporate crisis management and responses to investigations by authorities. Specialized teams collaborate and pool their knowledge to provide extensive legal advice to our clients.