Consumer protection and product liability laws in Japan

This article provides an overview of the regulations under consumer protection laws and product liability laws, highlighting what must be considered when engaging in business activities involving the sale of consumer products or the provision of services to consumers in Japan.

Consumer protection

Rie Hosaka
Partner
City-Yuwa Partners
Tokyo
Tel: +813 6212 5607
Email: rie.hosaka@city-yuwa.com

Consumer Contract Act. This act invalidates provisions that unilaterally prejudice consumer interests in an agreement between a consumer and a business. Typical examples of invalid provisions are:

1. 1. Having consumers waive their termination rights;
   2. Exempting the business from liability for any damages; and
   3. Having the consumers pay an excessive penalty.

An amendment in 2022 introduced a rule that a provision partially exempting the business from liability damages is invalid if it does not clarify that it does not apply to damages due to the business’ willful misconduct or gross negligence. If conducting an e-commerce business for the Japanese market, review the terms of service of the e-commerce site.

Act against Unjustifiable Premiums and Misleading Representations. This act regulates:

1. 1. Advertisements;
   2. Premium or giveaway.
      Particularly for the advertisements, the Consumer Affairs Agency strictly regulates and aggressively imposes administrative measures and has recently strengthened its enforcement framework by introducing the surcharge system (2016) and direct penalties (2024).

Advertisements that give consumers the impression that the quality of products is much better than the actual quality are prohibited. For example:

1. 1. When using words such as “the highest grade” or “No.1”, confirm the reason for describing the product as “the highest grade” or “No.1”;
   2. When using claims about efficacy or effectiveness, confirm that the claims are substantiated by appropriate test results; and
   3. When using customer reviews in advertisements, select a sufficient number of samples at random.

Advertisements that give consumers the impression that the transactional conditions (e.g., price and after-sales service) are much better than the actual conditions are prohibited. For example:

1. 1. Be careful, especially when displaying a discount. Comparisons between the current sales price and a different price (e.g., past sales price) must comply with a strict rule. For example, a past sales price generally may be used only if the product was sold at that price for a period exceeding four weeks within the most recent eight weeks.
   2. Repeatedly holding a limited-time campaign for a long time is a typical violation of this act. While no criteria are specified to determine what period will be a “long time”, there is a case of an administrative measure that repeatedly holds a “one-month limited campaign” for six months.

In addition, this act also regulates bait-and-switch advertising and stealth marketing. On premiums or giveaways, the act provides criteria for the value of the premium or giveaway that can be provided to consumers.

Act on Specified Commercial Transactions. This act regulates e-commerce businesses. A foreign business that sells products or provides services to individuals in the Japanese market must be aware of the rules under this act.

1. 1. The act specifies information that must be displayed on advertisements (e.g., the product detail page) and the checkout page, such as contact information, the name of the person responsible, and cancellation conditions.
   2. In addition, this act also prohibits attempting to make a customer place an order unintentionally (e.g., when clicking a button places an order, but the button is labelled “next” or “send” and so the customers cannot be aware that such a button places an order), sending a marketing message without customers’ prior consent, and exaggerated advertisements.

Act on Regulation of Transmission of Specified Electronic Mail. Sending a marketing message is regulated not only by the Act on Specified Commercial Transactions, but also by the Act on Regulation of Transmission of Specified Electronic Mail. This act provides for the opt-in rule and certain information that must be displayed in a marketing message (e.g., a URL or email address for opt-out).

Product liability

Risako Suzuki
Senior Associate
City-Yuwa Partners
Tokyo
Tel: +813 6212 5692
Email: risako.suzuki@city-yuwa.com

Product Liability Act. If a product has a defect in its manufacturing, design or warning instruction, and that defect causes damage to life, body or property other than the product itself, the manufacturer or importer has strict liability for the damages. Even if the customer misuses the product, the manufacturer or importer who fails to display a necessary warning on the product label is liable for the damage. Note that a seller who does not manufacture or import the product is not liable under this act.

Acts that require the display of certain information on products to provide consumers with information appropriately. There are acts that require the display of certain information on products to provide consumers with information. For example:

1. 1. Food Labeling Act;
   2. Pharmaceuticals, quasi-pharmaceutical products, cosmetics and medical devices: Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices;
   3. Textile goods, plastic goods, electrical appliances and apparatus, and miscellaneous manufactured goods: Household Goods Quality Labeling Act; and
   4. Alcoholic beverages: Act on Securing of Liquor Tax and on Liquor Business Associations.

Acts to ensure product safety.

1. 1. The Consumer Product Safety Act, the Electrical Appliance and Material Safety Act, the Gas Business Act, and the Act on the Securing of Safety and the Optimisation of Transaction of Liquefied Petroleum Gas. To ensure product safety, these acts require manufacturers or importers of specific products to submit notifications, undergo inspections for compliance with technical standards, and display a mark known as the PS (product safety) mark.

While a seller is not liable for notification or inspection, it cannot sell a product without the PS mark. Amendments to these acts will be effective on 25 December 2025. The key amendments are:

1. 1. 1. Products for children under the age of three years will be regulated by the Consumer Product Safety Act.
      2. For cross-border e-commerce, a foreign seller must appoint a “domestic manager” who is liable for the recording obligation of the inspection result, reporting obligation to the regulatory authorities, etc., as a representative in Japan of the foreign seller. (The appointment of the domestic manager is an obligation under the Electrical Appliance and Material Safety Act, and optional under the other three acts.)
   2. The Food Sanitation Act. This act provides standards that must be followed regarding foods, food additives, apparatus, containers and packaging for foods and toys for children under the age of six years. The recent amendment introduced a positive list system for containers and packaging made of synthetic resin.

Under Japanese law, businesses that provide goods or services are subject not only to general advertising and labelling regulations, but also to a wide range of rules for conduct that could unduly influence consumers’ rational decision-making regarding products or services, such as restrictions on the offering of premiums and prizes, and regulations on the transmission of marketing emails.

In addition, depending on the type of product, businesses may be required to provide consumers with specific information, as well as complying with general labelling requirements. Furthermore, it is important to note that businesses are subject to strict liability concerning product safety under the Product Liability Act and related laws.

Accordingly, when providing products or services in Japan, businesses must ensure full compliance with these legal and regulatory requirements.

CITY-YUWA PARTNERS
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Chiyoda-ku, Tokyo 100-0005, Japan
Tel: +813 6212 5500
Email: cy-info@city-yuwa.com
www.city-yuwa.com