December 16, 2022 Administrative Guidance to KDDI Corporation and Post Co., Ltd. on the Appropriate Adjustment of Improper Terminal Discounts

Post Co., Ltd. (Representative Director: OSAWA Hiroshi; Head Office: Atsugi City, Kanagawa Prefecture), which is entrusted by KDDI Corporation (President and CEO TAKAHASHI Makoto) to conclude contracts for the provision of telecommunications services as an intermediary, broker or agent, 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 issued a written instruction to Post Co., Ltd. to ensure thorough compliance with the provisions of the Act and to implement measures steadily to prevent the recurrence of the violation. In addition, MIC has verbally instructed KDDI Corporation to provide guidance to notifying persons entrusted with intermediation, etc. and to thoroughly implement other measures required to ensure proper and secure conduct of operations related to that entrustment.

Outline of the case and content of administrative guidance

Article 27-3, Paragraph 2 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 (hereafter referred to as "designated carriers") 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 of the Act shall apply to telecommunications carriers concluding contracts for the sale of telecommunications equipment (hereafter referred to as "target equipment"), including mobile terminals required to receive the services. The provisions of this article prohibit the telecommunications carriers from promising users of mobile telecommunications services to provide benefits that may hinder the proper competitive relationship between telecommunications carriers as specified by the relevant ordinance of MIC. Under Article 73-3 of the Act, this provision applies mutatis mutandis to notifying persons entrusted with intermediation, etc. that perform intermediation, etc. of conclusion of contracts related to provision of mobile telecommunications services provided by designated carriers. Moreover, under Article 27-4 of the Act, telecommunications carriers must provide guidance to notifying persons entrusted with intermediation, etc. or take other measures necessary for ensuring that the operations related to that entrustment are conducted in a proper and secure manner.
MIC recently confirmed that Post Co., Ltd. had (in 24 cases) promised users to provide inappropriate benefits on condition of continued use of the mobile telecommunications services provided by KDDI Corporation and purchase of the target equipment.
MIC recognizes that the conduct violates the provisions of Article 27-3, Paragraph 2 of the Act applied mutatis mutandis under Article 73-3 of the Act, and therefore has today issued Post Co., Ltd. with a written instruction to ensure thorough compliance with the provisions of the Act and to steadily implement measures to prevent the recurrence of the violation. In addition, MIC has verbally instructed KDDI Corporation to provide guidance to notifying persons entrusted with intermediation, etc. and to thoroughly implement other measures required.
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, and has also set up a contact desk related to mobile phone sales agents on the MIC website to collect information on any inappropriate conduct by sales agents. MIC will use the content of the information provided to encourage fair competition in the mobile market, in an effort to ensure the sound development of the telecommunications market and safeguard the interests of the public.