Japan's Fair Trade Commission raids 20+ firms over condo repair bid-rigging

On Tuesday, Japan's Fair Trade Commission conducted on-site inspections of more than 20 firms suspected of rigging bids for condominium repair projects across Aichi, Gifu, and Mie prefectures in central Japan. The targeted companies represent a cross-section of the construction industry: general contractor Asanuma, Haseko Reform (a subsidiary of construction company Haseko), Kenso Kogyo, Nihon Housing, Daikyo Anabuki Construction, and construction-consulting firm T.D.S. The FTC's investigation centers on allegations that these firms prearranged contract winners rather than competing openly for projects.

This enforcement action continues a pattern the FTC established in March of last year, when it inspected Haseko Reform and others in connection with a similar bid-rigging case in the Kanto region. The FTC now plans to issue cease-and-desist orders to some 40 firms in the Tokai case, accusing them collectively of colluding to fix bids. The commission believes that bid-rigging in the region has persisted for several years, suggesting a systemic and long-running practice.

Bid-rigging raises construction fees unfairly, placing the financial burden on condominium owners and management associations. According to a fiscal 2021 survey conducted by the land ministry, approximately 40% of condominium repair projects in Japan cost at least ¥100 million, with average per-apartment expenses ranging from ¥1 million to ¥1.25 million. By eliminating genuine price competition, the alleged collusion inflates these already substantial costs. Asanuma said it would fully cooperate with the investigation.

Bid-rigging in Japan's construction sector, particularly in condominium repair projects, represents a long-standing antitrust concern. The Fair Trade Commission's latest action—Tuesday's raids across Aichi, Gifu, and Mie—extends a pattern of enforcement the agency has already pursued: in March of last year, it inspected Haseko Reform and others in connection with similar rigging in the Kanto region. The FTC's belief that the Tokai scheme has operated for several years suggests the practice has been entrenched and systematic.

The economic stakes are substantial. Condominium repair projects constitute a major spending category for apartment owners and building management associations: approximately 40% of projects exceed ¥100 million in total cost, and per-apartment charges typically fall between ¥1 million and ¥1.25 million. When contractors collude to prearrange winners—the mechanism the FTC alleges—these costs are inflated beyond what competitive bidding would produce, effectively transferring wealth from building owners to the conspiring firms. The planned cease-and-desist orders targeting some 40 firms signal the FTC's intent to disrupt the scheme across the entire region.