May 29, 2020 Guidance to NTT Docomo and Its 70 Dealers concerning Improper Sales Price Discount of Mobile Terminals and Pertaining Conditions

  Those commissioned by NTT Docomo Inc. (headed by Kazuhiro Yoshizawa, President and CEO) to provide brokerage and other services were found to have made improper terminal discounts and offered additional benefits to customers. Their acts violated the Telecommunications Business Act (Act No. 86 of 1984). Therefore, the Ministry of Internal Affairs and Communications (MIC) today instructed 70 companies commissioned by NTT Docomo to outsource operations, such as an intermediary, to ensure strict compliance with the provisions of the Act and to implement measures to prevent recurrence steadily. Furthermore, MIC instructed NTT Docomo to take thoroughgoing steps for its contractors, such as contract brokers.

Outline of the Case and Contents of Administrative Guidance

Article 27-3, Paragraph 2 of the Telecommunications Business Act (hereafter referred to as “the Act”) after the amendment specifies: If a telecommunications carrier designated by the Minister of Internal Affairs and Communications pursuant to paragraph 1 of the same Article concludes a contract of the sale of mobile terminal equipment as telecommunications equipment necessary for receiving mobile telecommunications services, the Act prohibits the telecommunications carrier or a third party from providing the user of the mobile telecommunications services pertaining to the contract with benefits that may impair the appropriate competitive relationship between telecommunications carriers to the extent specified by an Ordinance of the Ministry of Internal Affairs and Communications. Article 73-3 specifies that the above provision shall apply mutatis mutandis to contract brokers who are involved in such matters as mediating the conclusion of contracts for the provision of mobile telecommunications services provided by telecommunications carriers specified pursuant to Article 27-3, Paragraph 1 of the Act. Article 27-4 of the Act requires that telecommunications carriers shall take necessary measures to ensure the proper and reliable execution of guidance and other tasks related to outsourcing.
Recently, 601 cases of profit offers were found in those who have been commissioned by NTT Docomo for intermediary services. These profits exceeded the maximum amount prescribed in Article 22-2-16, Paragraph 1 of the Regulations for Enforcement of the Telecommunications Business Act (MPT Ordinance No. 25 of 1985) for contracting the provision of mobile telecommunications services and mobile terminal equipment to be purchased. These cases violate the provisions of Article 27-3, Paragraph 2, Item 1 of the Act, which is applied mutatis mutandis pursuant to Article 73-3 of the Act. They are considered to impair the appropriate competitive relationship between telecommunications carriers. MIC today instructed 70 companies commissioned by NTT Docomo to outsource operations, such as ensuring thorough compliance with the laws and steadily implementing measures to prevent recurrences, and guide the contractors, such as contract brokers, and other necessary steps.
MIC will continue striving to enforce the law to secure an appropriate competitive environment in the mobile market.

MIC has an information contact window for efforts toward optimized sales of terminals at each Regional Bureau of Telecommunications to ensure compliance with the law. If the provision of profits contrary to the law or the restriction of the period is permitted based on the information provided, MIC will check the status of telecommunications carriers and their contractors, including contract brokers’ efforts and guide improvements as necessary.