Abuse of relative, or relational, power seems to particularly prevails in the entertainment business sector.
On December 26, 2024, Japan Fair Trade Commission (JFTC) released the results of its survey, which was prompted by the 2019 Johnny & Associates case,* finding several competition-related concerns, including abuse of superior bargaining position. Here are some key takeaways of the JFTC's survey results, relying on the Asahi article (so there may be errors or some distortions reflecting my own perspective).
1. Structural imbalance:
In my view, the JFTC seems to find that the root cause lies in the dependent, one-sided relationship between (large, concentrated) talent agencies and (fragmented) entertainers, and that this structural imbalance gives rise to several exploitative and exclusionary (or unfair competition) concerns.
2. Vertical exploitative concerns:
Some exploitation concerns were identified as follows: (i) ambiguous, verbal contracts without written agreements; and (ii) unilateral contract extensions, even when entertainers wish to leave at the end of their term. These practices were pointed out as potentially amounting to abuse of superior bargaining position under Japan’s competition law.
3. Horizontal lessening competition (and/or unfair competition) concerns:
The JFTC also highlighted that lessening competition (and/or unfair competition) concerns arise from retaliatory actions by agencies against entertainers leaving their contracts, such as blacklisting or pressuring other agencies not to hire them. Additionally, the JFTC noted that the agencies imposing restrictions on entertainers' stage or group names, harming their careers, could constitute an illegal refusal (as unfair conduct lessening competition).
Based on these findings, the JFTC is expected to issue guidelines in 2025. (Personally, I don’t think actual enforcement action is likely to be in sight.)
Japan Fair Trade Commission, 'Market Study on Transactions Between Performers and Entertainment Agencies in the Music and Broadcasting Industry (Market Study on Ensuring Fair Transactions to Support Creators)' (Press release Dec 26, 2024) https://lnkd.in/gcA5BqX2
(JPN) https://lnkd.in/grVCyN6e
Yosuke Takashima, Hiroshi Nakano and Kyota Tanaka, 'Agencies control entertainers with vague contracts, threats' The Asahi Chimbun (Dec 27, 2024) https://lnkd.in/g36KBYYJ
* FYI: The Johnny & Associates case (2016-2019) serves as the background for the survey. To put it roughly, this case involved coercive practices by a large talent agency, Johnny & Associates, against affiliated entertainers. Reportedly, after some entertainers (members of SMAP) left the agency amid conflicts, the company (as a retaliation in my view) engaged in unjust practices, including pressuring broadcasters and other media not to cast them. For that, in 2019, the JFTC issued a warning against the talent agency.
Global Strategy Director at David Madrid
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