This content is from: Local Insights

Japan: Consumer protection changes

Takuya Sonoda
In 2014, the Japanese Diet agreed to amend, in two stages, the Act against Unjustifiable Premiums and Misleading Representations. This was following a series of scandals in which the menus used at a number of famous hotels and restaurants in Japan were found to be misleading, listing ingredients not actually used in the dishes.

First, the Act for Partial Amendment of the Act against Unjustifiable Premiums and Misleading Representations (Law 71 of 2014) was promulgated on June 6 2014 and came into force on December 1 2014. This amendment introduced the requirement that business operators take all necessary measures to ensure the accuracy of all representations made to customers, including the establishment of appropriate managerial systems. Prime Minister Abe, on November 14 2014, oversaw the publication of guidelines to this amendment, setting out the fundamental policies of the amendment and listing specific examples of measures that must be taken by business operators in Japan.

Second, the Act for Partial Amendment of the Act against Unjustifiable Premiums and Misleading Representations (Law 118 of 2014) was promulgated on November 27 2014, and will come into force within 18 months (on a specific date to be determined by way of cabinet order). This amendment will introduce the requirement that business operators found to have made a misleading representation to the public, as prescribed in the amendment, will be required to pay an administrative monetary penalty equivalent to three percent of the amount of sales of the relevant goods or services, calculated by a method to be prescribed by cabinet order. The amount of this penalty may be reduced where the business operator provides refunds to consumers of the subject goods or services. Importantly, under the amendment, where the government requests the submission of materials by a business operator in support of any representations made by it with respect to its goods or services and such business operator fails to submit such materials, the representations will be deemed to be misleading and the business operator may be found liable for the prescribed penalties

Takuya Sonoda

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