It is said that modern Japan is becoming a “data-driven society” in which data drives the economy. Huge volumes of data are accumulated at unprecedented speed thanks to the use of smart phones and sensors and the expansion of digital transactions. This fact and dramatic developments in data analysis technology, such as AI, have meant that the way we do business is undergoing a transformation.

In the financial industry, attention has been drawn to new areas such as blockchain technology, which has enabled the cryptocurrency market. The government is tending to promote policy decisions based on empirical evidence, and even in conventional decision-making, objective data is becoming increasingly important in verification. At the same time, the government is considering setting up a portal site to supply big data as an infrastructure tool to promote data analysis. Underlying this is the fact that the data accumulated everyday as big data is coming available for use and also the fact that it has become possible to collect large volumes of data at low cost through questionnaire surveys conducted over the internet.

In businesses that use big data, on the one hand the business activities of companies that are already key operators can lead to significant benefits for consumers, but on the other hand there are concerns that this may hinder market competition.

Therefore, at the 2018 NERA Annual Seminar, we used our experience in data analysis and the creation of empirical evidence to delve into issues faced by parties involved in disputes, regulation and policy making in a data-driven society, looking at the issues from an economist’s perspective and examining analysis methods and points to take into account.

“DISPUTES CONCERNING CRYPTOCURRENCY AND INITIAL COIN OFFERINGS (ICO): LATEST TRENDS AND ECONOMIC ANALYSIS IN THE US”

Tomohiko Yano - Doctor of Economics, NERA - Tokyo Office

2017 saw a rapid development in practices involving cryptocurrency in Japan, with various news reports on cryptocurrency sparking interest, including reports of a rapid increase in the number of users due to the extreme fluctuations in the crypto market and a rise in the procurement of funds through the issuance of cryptocurrencies, etc., (Initial Coin Offerings - ICO). Among these cases, one in particular attracted attention: that of a class action lawsuit brought by users of the crypto exchange Coincheck in the matter of an illegal hack and theft of the cryptocurrency NEM from the exchange. With the crypto market being in the developmental stage, disputes involving cryptocurrency exchanges and the companies issuing coins in ICOs are expected to increase in the future. This lecture introduced litigation cases involving cryptocurrencies and ICOs in the US, where a number of such disputes have already arisen. In addition, the relationship between potential points of contention and economic analysis in cryptocurrency-related disputes was examined.

“HOW TO CREATE EVIDENCE FOR EVIDENCE-BASED POLICY MAKING: THE ROLE OF ECONOMIC ANALYSIS”

Eishiro Takeda - Doctor of Economics, NERA - Tokyo Office

The “Basic Policies For Economic And Fiscal Management And Reform - 2017” states that Evidence-Based Policy Making (EBPM) should be promoted, and the momentum for EBPM is increasing in Japan. This spring, the EBPM Promotion Committee is scheduled to publish “Guidelines For Decisions On The Supply Of Statistical Data, Etc.,” and platform facilities to allow the use of statistics, etc., (a prerequisite for EBPM) are being developed—for example the big data portal site being considered by the government. As public and private data is made widely available, companies need to not simply express their opinions but also actively create evidence and become involved in the formulation of policy. However, even if something is called evidence, its reliability can vary greatly and effective policy making cannot be expected from unreliable evidence that has been produced using questionable methods. Therefore, this lecture used actual examples and NERA’s experience to examine how economic analysis can be utilized to create reliable evidence, given funding constraints and limitations on time.

“CONSUMER QUESTIONNAIRE SURVEYS IN INTELLECTUAL PROPERTY AND ANTITRUST LAW: ISSUES OF PROOF BASED ON EMPIRICAL EVIDENCE”

Naoya Kaneko - PhD in Agricultural, Environmental and Development Economics, NERA - Tokyo Office

With the introduction of new types of trademarks such as 3D trademarks, color trademarks, and positional trademarks, questionnaire surveys have taken on an important role in proving the distinctiveness of a trademark. In addition, newspaper reports that JFTC was to repeat a consumer survey on the business integration of Fukuoka Financial Group and the Eighteenth Bank sparked interest in the use of questionnaire surveys as a basis for decision making. How should questionnaire surveys be conducted and how should companies, the authorities, and judicial decisionmakers evaluate the results given that a slight change in the questions can change them so dramatically and that the same question can produce different results depending on the field it refers to or its timing? In the seminar, we used our experience gained in numerous surveys in the fields of intellectual property and antitrust law to explain the practicalities of conducting questionnaire surveys, such as the problems with research methods and how they can affect results, and the points that need to be noted to avoid making mistakes in the determination of facts, etc.

“RESPONDING TO ANTITRUST REGULATION AND LITIGATION IN THE ERA OF BIG DATA”

Hiroaki Ishigaki, Representative of NERA Tokyo Office and Doctor of Economics

While the use of big data is expected to be one of the pillars of growth strategy in Abenomics, conversely there have also been concerns expressed in connection with antitrust laws such as potential issues of invasion of privacy; refusal to trade; exclusion of competitors; and abuse of dominant bargaining position, etc., in relation to trade with powerful platform operators such as Google, Amazon and Facebook, as well as in inter-company trades and alliances associated with data use. In addition, people have pointed out the limitations of existing frameworks and the need for new ones when evaluating antitrust issues related to big data. The lecture discussed the opinions of competition authorities and academics as well as actual case studies and examined antitrust issues related to big data, analysis and evaluation methods, and future prospects, from an economist’s perspective.