September 11, 2020 Guidance to Rakuten Mobile, Inc. on the Appropriate Adjustment of Improper Terminal Discounts

Rakuten Mobile, Inc. (Representative Director and President YAMADA Yoshihisa) was found to have made improper terminal discounts in violation of the Telecommunications Business Act (Act No. 86 of 1984). Therefore, the Ministry of Internal Affairs and Communications (MIC) has today instructed Rakuten Mobile, Inc. to ensure thorough compliance with the provisions of the Act and to implement measures steadily to prevent the recurrence of the violation.

Outline of the Case and Contents of Administrative Guidance

Article 27-3, Paragraph 2, Item 1 of the Telecommunications Business Act (hereafter referred to as the “Act”) stipulates that telecommunications carriers designated by the Minister for Internal Affairs and Communications pursuant to Paragraph 1 of the same Article shall be assigned to mobile telecommunications services (those stipulated in Article 27-3, Paragraph 1 of the Act, and the same shall apply hereafter). Article 27-3, Paragraph 2, Item 1 of the Act shall apply to telecommunications carriers concluding contracts for the sale of telecommunications equipment, including mobile terminals required to receive the services. The provisions of this article prohibit the telecommunications carriers from promising with users of mobile telecommunications services directly or through third parties to provide those that may hinder the proper competitive relationship between telecommunications carriers as specified by the relevant ordinance of MIC.
Rakuten Mobile, Inc. has recently launched a campaign called a Summer Smartphone Specials Campaign to award points worth 22,000 yen. This campaign was conditioned on the conclusion of a contract for mobile telecommunications services and the purchase of target equipment (the equipment specified in Article 22-2-16, Paragraph 1, Item 1 of the Regulations for Enforcement of the Telecommunications Business Act (MPT Ordinance No. 25 of 1985; hereafter referred to as the “Enforcement Regulations”). Then MIC confirmed that a total of 1,186 cases of Rakuten Mobile, Inc. promising to provide profits exceeding the maximum amount (the maximum amount stipulated in Article 22-2-16, Paragraph 1, Item 2 of the Enforcement Regulations).
MIC recognizes that the campaign violates the provisions of Article 27-3, Paragraph 2, Item 1 of the Act, and may hinder the proper competitive relationship between telecommunications carriers. Therefore, MIC has today instructed Rakuten Mobile, Inc. to comply with the provisions of the Act thoroughly and steadily implement measures to prevent the recurrence of the violation.

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 to optimize terminal sales 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.