August 1, 2022 Request for Implementation of Measures Including Guidance to Ensure the Appropriateness of Distributors’ Operations, and Implementation of Initiatives for Strengthening the Complaint Processing Systems

The Ministry of Internal Affairs and Communications (MIC) has today requested NTT Docomo Inc. (headed by II Motoyuki, President and CEO), KDDI Corporation (headed by TAKAHASHI Makoto, President and CEO), SoftBank Corp. (headed by MIYAKAWA Junichi, President and CEO), Rakuten Mobile, Inc. (headed by YAZAWA Shunsuke, Representative Director and President), and the National Association of Mobile-phone Distributors (headed by KANAJI Nobutaka, Director) to re-implement measures including guidance to ensure the appropriateness of the operations of mobile phone distributors. MIC also requested the Telecommunications Carriers Association (headed by SHIMADA Akira, Chairman) and the Japan Cable and Telecommunications Association (headed by WATANABE Katsuya, President) to implement measures relating to initiatives for strengthening the complaint processing systems.

The Study Group on Consumer Protection Rules (chief investigator: NIIMI Ikufumi, Professor Emeritus, Meiji University) held discussions in accordance with the 2021 Report of Study Group on Consumer Protection Rules, released in September 2021, and compiled Recommendations on Initiatives Based on the 2021 Report of Study Group on Consumer Protection Rules (hereinafter referred to as the "Recommendations") in July 2022. Today, MIC made requests on the following two points to the relevant carriers, etc., based on the recommendations.

1. Regarding measures including guidance to ensure the appropriateness of the operations of distributors

There are approximately 8,000 stores (so-called carrier shops^*) of major mobile phone operators nationwide. They are users’ most familiar contact points to handle mobile phone service contracts and after-sales services.

• *
  In fact, most of them are operated by distributors though the carrier shops nationwide include those directly managed by mobile phone operators.

Since mobile phone operators offer various rate plans and options, it is not easy for users to select a contract that suits their needs. For this reason, these carrier shops, where users can receive face-to-face explanations and support, play a key role. Accordingly, in May 2021, MIC requested mobile phone carriers, etc. to implement measures to ensure the appropriateness of the operations of these shops.

According to the recommendations, the results of a survey conducted by MIC this year (published on April 25, 2022) suggest that inappropriate acts have continued to be widely conducted after MIC's request in 2021, and that such acts are rarely conducted based on the staff's own determinations, but are mostly conducted due to external pressure, such as the sales goals set by the mobile phone carrier or the mobile phone distributor, or instructions by the shop manager, etc.
The recommendations also mention that the Contact Desk Related to Mobile Phone Sales Agents set up by MIC in September 2021 received voices that, with the current fee and evaluation systems for distributors provided by mobile phone carriers, distributors inevitably have to prioritize getting contracts over protecting user interests, and that the target numbers of new subscriptions are set too high.
On such basis, the recommendations state that the various initiatives that have been conducted by mobile phone carriers and distributors are insufficient, and indicate issues concerning the target numbers of new subscriptions presented by mobile phone carriers to distributors and issues concerning sales at temporary outlets.

Based on these indications, MIC has today requested NTT Docomo Inc., KDDI Corporation, SoftBank Corp., and Rakuten Mobile, Inc. to review and strengthen, as necessary, the measures they are currently conducting to ensure appropriate and secure implementation of the operations of distributors. MIC also requested them to take necessary measures for preventing distributors from conducting inappropriate acts, such as ensuring a system in which distributors are sufficiently urged to conclude contracts according to the principle of suitability. In addition, MIC requested the National Association of Mobile-phone Distributors to have its member distributors take necessary measures.

2. Regarding initiatives for strengthening the complaint processing systems

With regard to the strengthening of the complaint processing systems, the Task Force on Complaint Processing Systems was established under the Study Group on Consumer Protection Rules (chief investigator: NIIMI Ikufumi, Professor Emeritus, Meiji University) in response to the 2021 Report of Study Group on Consumer Protection Rules, compiled by the Study Group in September 2021. In June 2022, the Task Force compiled a report, stating that it is appropriate to start operation of new complaint processing systems on a trial basis in the form of voluntary initiatives by trade associations, and to continuously verify the status of operation as well as the effects and issues of the systems at the Study Group.
As the recommendations in July this year indicated that relevant associations should take measures based on this Task Force report, MIC has today requested the Telecommunications Carriers Association and the Japan Cable and Telecommunications Association to implement measures relating to initiatives for strengthening the complaint processing systems.