Japan: 3 major electricity companies face record-high ¥101 bil in antitrust fines (Chugoku Electric, Chubu Electric, Kyushu Electric)

Japan’s antitrust watchdog on Thursday ordered three major utilities to pay a total of 101 billion yen in fines for forming cartels over electricity sales, in a move that goes against the nation’s efforts to free up the electric power market.

The amount of the penalty, to be collected from electricity companies based in central, western and southwestern regions, is the highest ever imposed by the Japan Fair Trade Commission for a violation of the antimonopoly law.

Chugoku Electric Power Co was slapped with about 70.7 billion yen in surcharges, Chubu Electric Power Co and its subsidiary with about 27.56 billion yen, and Kyushu Electric Power Co with about 2.76 billion yen, the commission said.

Chubu Electric decided to file a lawsuit seeking to nullify the order.

Kansai Electric Power Co, headquartered in Osaka, was found to have formed a cartel with each of the three firms but was exempted from punishment by voluntarily reporting the violation to the watchdog before a probe began.

According to the commission, the utilities had agreements that led them to refrain from engaging in activities to acquire new large-lot customers, such as big factories, outside their traditional service areas.

Such restrictions on winning new customers were in place from October and November 2018 at the latest and continued until Kansai Electric halted the practice in October 2020, according to the commission.

Japan started opening up its electricity market in 2000 in a bid to end the decades-long monopoly of regional power companies and help lower electricity bills by promoting competition.

The market was liberalized for large-lot customers such as factories and office buildings the same year, and for households and other small-lot consumers in 2016.

Chugoku Electric President Natsuhiko Takimoto said Thursday he will step down after a shareholders’ meeting in June to take responsibility for the cartel case.

“We lost public trust and take this massive surcharge order seriously,” the president told a press conference, adding that he wants the company, headquartered in Hiroshima, to start afresh under new management.

Takimoto, however, said the utility may consider filing a lawsuit, citing that there are some portions in the watchdog’s order it cannot agree with.

The penalty amount for Kyushu Electric, based in Fukuoka, has been cut by 30 percent as it reported the violation to the commission after the probe started.


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