Deterrence of Antitrust Violations: Do Actions for Damages Matter in Japan?

Posted by D. Daniel Sokol

Simon Vande Walle, University of Tokyo – Graduate School of Law and Politics asks Deterrence of Antitrust Violations: Do Actions for Damages Matter in Japan?

ABSTRACT: There is considerable debate about the role private litigation should play in the enforcement of antitrust law. This article focuses on one particular private enforcement mechanism – damages actions – and assesses whether and how much such actions have contributed to deterring antitrust violations in Japan. It does so by answering two questions: (1) how much have damages actions contributed to the detection of antitrust violations?, and (2) how much have damages actions contributed to an increase in the sanctions for antitrust violations?
Based on original data concerning damages actions between 1990 and 2010, the article argues that damages actions have somewhat contributed to deterring certain antitrust violations, bid-rigging in particular, but that this deterrence has mainly originated from the fact that damages imposed an additional sanction on the infringers. Damages actions have rarely brought to light violations that were not detected previously by the Japan Fair Trade Commission or criminal prosecutors. Hence, an almost equivalent measure of deterrence could have been generated more efficiently by imposing higher penalties through public enforcement.