The Japan Fair Trade Commission (JFTC) plans to demand that three major mobile phone carriers review their relationships with mobile phone resellers, claiming that the carriers' systems of evaluating the resellers could result in consumers being led to sign up for excessively high-rate plans, which is undesirable from the perspective of fair competition.
The viewpont was noted in its report on a study of the mobile phone market released Thursday. The JFTC used interviews and questionnaires in the study, since last autumn, to collect information from the three major carriers -- NTT Docomo Inc., KDDI Corp. and SoftBank Corp. -- as well as budget mobile network operators and 4,000 users.
NTT, KDDI and SoftBank may be forced to make improvements to their relationships with resellers.
The survey report said that the carriers' systems for evaluating mobile phone resellers heavily emphasize the number of contracts they sell for high-priced plans. It is feared that this rating system spurs distributors to encourage customers to sign up for more expensive contracts than they actually need. Such circumstances are not desirable in terms of customers flexibly choosing the most suitable rate plan, the JFTC said.
Meanwhile, the watchdog also said it received complaints that the three carriers have controlled the prices of handsets so that those sold by resellers would never be cheaper than the online prices set by the carriers. The JFTC said that this may be a practice that is prohibited by the Antimonopoly Law.
The JFTC also deemed it to be a violation of the Antimonopoly Law if the carriers offer a contract, when selling a handset on an installment plan, that waives some payments on the condition of purchasing a new handset in the future. An example of this would be a case in which a customer buys a phone on a three-year installment plan and is exempted from the last one year of payment on the condition that they trade in the phone and purchase a new one two years later. The JFTC pointed out that this effectively deprives consumers of the right to switch carriers by forcing them to give up the ability to change their contracts.
The JFTC conducted a similar study in 2018 and issued a report criticizing the carriers for offering subsidies such as discounts on telecommunication services fees as part of a package deal including the fees and handset sales. The latest report noted that similar practices to keep consumers locked in still exist even today.
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