Economic analyses have been used by major competition authorities around the world to support and test their arguments: the EU Commission's Directorate-General for Competition (DGCOMP) has Chief Economist Team, and the US Federal Trade Commission and Department of Justice also have their own economic analysis units. These economists sometimes play decisive roles in determining the result of an investigation.

Japan's antitrust watchdog, the Japan Fair Trade Commission (JFTC), has now begun to adopt a similar approach in applying economic analysis to individal cases. 

In the 2021 OECD Global Forum on Competition held last December, competition authorities, scholars, and consultants discussed economic analysis and evidence in abuse cases. For the forum, JFTC submitted a memorandum that explains the recent cases where JFTC performed economic analyses and outlining how they organize and use economists.

One case mentioned in the memorandum is Amazon Japan's Most-Favorite-Nation (MFN) case where JFTC says they relied on economic theories to set out possible harms on competition brought by MFN clauses.

The second case also involves Amazon Japan which JFTC alleged abused its superior bargaining position over its vendors. It appears that JTFC examined empirical economic analysis submitted by the party to calculate the value of the benefit at the heart of the issue.

Furthermore, the memorandum outlined the structure of the Economic Analysis Team (the Team), which comprised a team leader, two strategists, and twelve team economic analysts. According to the memorandum, supporting antitrust cases, including abuse cases, is one of the Team’s priorities; if the case team asks for assistance, two or three team members are usually seconded to give their support. Their tasks include giving advice to the case team for considering theory of harms, designing questionnaire surveys, conducting quantitative analysis, and attending the state of play meetings with enterprises concerned at request.

So, all of these movements seem to be positive in terms of increasing transparency of JFTC's decisions, ensuring defendability of involved parties, and enhancing the predicatability of JFTC's enforcement actions. 

However, I have a view that there may be challenges for JFTC to effectively utilize economic analysis in its enforcement. 

First and foremost, JFTC will need to give its economists authority in JFTC's decision making process. The Economic Analysis Team appears to be virtual, meaning it is not a formal division yet, and therefore its authority within the agency seems to be unclear. Second, JFTC will need to secure budget and resources for economic analysis in the long term so as to embed it firmly in the investigation process. 

That said, I am of the view that private companies and their counsel would benefit from greater utilization of economic analysis by JFTC, largely in the form of more reasonable enforcement by JFTC. When a company becomes a subject of JFTC's enforcement, it will need to employ robust economic analysis to defend its position, which JFTC will seriously consider. When a party believes that it suffers from antitrust conduct, submitting economic evidence which supports the argument will also be taken seriously by JFTC.

So, will we see greater roles and involvements of economists in JFTC's enforcement going forward? Definitely yes, and utilization of economic analysis is going to be even more important strategic consideration for private companies and their counsel.