Japan fair trade chair on alert against abuse of data dominance by IT giants: interview

TOKYO -- Japan Fair Trade Commission Chairman Kazuyuki Sugimoto is watching carefully for signs that major international IT firms are using their monopolistic hold on big data to crush other companies, he told the Mainichi Shimbun in a May 14 interview.

Sugimoto also revealed that the commission is bringing on more IT and other specialists and working harder to craft a competition policy for the digital age. The following are excerpts of the interview, edited for length and content.

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Mainichi: You were reappointed as commission chairman in March this year. What are the priority issues for your second term?

Sugimoto: I want to move ahead with addressing the digitization and globalization of the economy. In particular, (big IT companies' product and service) platform businesses are coming to dominate the market. While these are convenient for most consumers to connect to, I will keep a watchful eye to make sure the businesses aren't unfairly enclosing their customers and blocking market entries by newcomers, or using their advantageous position to disadvantage their business partners.

M: What specific measures are you undertaking?

S: We are watching with interest the German authorities' investigation of Facebook, as well as the enormous fine the European Union ordered Google to pay. In the digital domain, IT and other specialist knowledge is indispensable, and investigative techniques are becoming sophisticated. We will likely need to bring in specialists in IT and economic analysis from outside.

M: A committee of experts set up by the Financial Services Agency (FSA) released a report on the review of the integration of Fukuoka Financial Group Inc. and The Eighteenth Bank Ltd. this past April. How have you taken that report?

S: I can't speak on matters concerning an ongoing inquiry. But speaking generally, if a merger will limit competition, then it becomes a legal question of whether to issue a cease-and-desist order, and not a matter of whether it is desirable from the point of view of financial administration.

We conduct all of our inspections based on the idea that, in any industry, consumers are harmed if competition is not guaranteed. A structure where a company uses a monopoly position to increase their interest rates or reduce lending is a problem. A company that doesn't provide services highly valued by its customers will itself deteriorate as well.

M: The FSA is asking to cooperate with the Fair Trade Commission, isn't it?

S: We are speaking with them (the FSA), and even if one can say our understanding of the issues is different, if we can't agree then we are in trouble. We will take FSA opinions into account when we can, but at present there is no reason to give special treatment to (joint reviews of) financial institutions.

(Original Japanese interview by Kenji Wada and Takashi Narumi, Business News Department)