The Japan Fair Trade Commission (JFTC) plans to issue a recommendation to Honda Ibaraki Minami for violating the Subcontract Act [1].

This regulatory action highlights the JFTC's ongoing efforts to prevent larger companies from exploiting smaller subcontractors through unfair trade practices. Such violations can distort competition and place an unsustainable financial burden on small businesses within the automotive supply chain.

According to the JFTC, the Honda-affiliated dealer in Ibaraki Prefecture required maintenance providers to transport vehicles without compensation [1]. This practice occurred over a period of approximately one year, beginning in the autumn of 2024 and continuing through the autumn of 2025 [1].

The scale of the operation was significant, involving more than 1,000 vehicles [2]. The JFTC determined that the dealer imposed these demands on approximately 10 maintenance companies [2]. Under the Subcontract Act, companies are prohibited from imposing unfair burdens on subcontractors, and the requirement for free transport was deemed an unfair trade practice [1].

A representative for Honda Ibaraki Minami acknowledged the ongoing investigation. "It is a fact that we are under investigation. If we receive specific guidance from the JFTC in the future, we wish to follow it," the representative said [1].

The JFTC is expected to finalize the recommendation this week to ensure the dealer corrects its business practices and compensates affected parties if necessary. The agency continues to monitor the automotive sector for similar abuses of power where dealerships leverage their market position against specialized repair shops.

“The JFTC plans to issue a recommendation to Honda Ibaraki Minami for violating the Subcontract Act.”

This case underscores the JFTC's strict enforcement of the Subcontract Act to protect small-to-medium enterprises from 'power harassment' in business dealings. By targeting a well-known dealership brand, the regulator is sending a signal that operational efficiencies cannot be achieved by shifting costs onto subcontractors, which could lead to increased auditing of other automotive dealerships across Japan.