Fair trade officials give TEPCO a slap on the wrist

The Fair Trade Commission issued a written warning to Tokyo Electric Power Co. (TEPCO) over its 17-percent rate hike for business customers this April but drew back from any legally-binding measure to stay the company’s hand.

While rebutting demands from some customers for legal sanctions against TEPCO, the commission warned on June 22 that the utility had come close to violating the Anti-Monopoly Law.

The commission’s carefully-worded statement criticized TEPCO’s drive to unilaterally impose the increase on businesses, saying its approach had flirted with an illegal “abuse of dominant bargaining position.”

But it concluded that the 17-percent average raise could not be described as “extremely high” and that the utility’s efforts in March, under instructions from the industry ministry, to explain the reasons for the hike to its customers on the telephone or through other means meant it was not necessary to impose a legally-binding order.

Between January and March this year, TEPCO told large-lot users unilaterally that it would raise their electricity rates by the 17-percent average.

The commission’s warning states that TEPCO, which supplies most of the electricity for companies in its area, is in a dominant bargaining position, and that many companies would find it difficult to stay in business if they tried to discontinue their TEPCO supply.

Companies are therefore in a position where they might be forced to accept TEPCO’s demands, according to the commission, despite the fact that TEPCO has no formal right to raise the rates unilaterally before the termination of the current contracts unless it gets consent from the customer.

One document sent by TEPCO to middle- and small-sized firms read: “If you do not express an objection, we will assume that you agree (to the electricity rate hike).”

The commission said the approach was inappropriate but concluded that TEPCO’s acts did not constitute a violation of the Anti-Monopoly Law.

Manabu Naito, director of the secretariat of a Yamanashi Prefecture supermarket operators’ organization that asked the commission to investigate TEPCO, criticized the warning.

“(It) is an ambiguous answer. It leaves the current situation unchanged,” he said.