Japan

Fujifilm's views on Kodak's procedure under the section 301 petition

REWRITING HISTORY

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Kodak's Revisionist Account Of the Japanese Consumer Photographic Market

Foreword
by

Mr. Minoru Ohnishi
President
Fuji Photo Film Co., Ltd.

On reading the nearly three hundred pages of allegations prepared by Kodak for its Section 301 petition, someone with no knowledge of the photographic materials industry or the facts would walk away with the impression that everything in the petition was true. After all, the allegations are being made by a respected company. No one could be faulted for assuming that, even if they are not entirely true, the majority have some basis in fact.

If, however, one begins to examine the alleged facts and purported sources upon which Kodak bases its claims, it becomes clear that they are complete fabrications. In addition, anyone who has even the slightest knowledge of the photographic materials industry will readily see the parallels between Kodak's allegations regarding Fujifilm and the practices which Kodak itself pioneered and continues to use to this day to secure its position in the marketplace. In short, it becomes clear how utterly misdirected these accusations are.

Over the past several weeks, Fujifilm has concentrated its resources on showing that Kodak's claims are untrue, irresponsible and self-serving. We have been concerned that allowing these groundless accusations to remain unanswered for too long will give them credibility. On the other hand, we have realized that Kodak's "Privatizing Protection" does not rely on facts, but on attempting to establish guilt through association, innuendo, and mischaracterization of facts. We have, therefore, attempted to be careful that our response to these allegations does not rely on anything but facts. It has taken time to review almost thirty years of history in this industry. We are confident, however, that the time we have taken to develop the real facts will be time well spent.

Fujifilm and Kodak are engaged in an intense competition for world markets. Up until now, we have considered Kodak to be a company with a proud history and tradition, a company that rightly deserves a strong reputation both in terms of its ability to develop products and to market those products. Indeed, we have had great respect for Kodak as a rival. While we have, from time-to-time, been disturbed by the extremes to which Kodak will go in order to protect its position in the photographic materials market, we have attributed these to aggressive sales policies that have inadvertently crossed the line between zealous competition and questionable practices.

But this time, Kodak has violated all the standards of business ethics. It has shamelessly made false allegations against Fujifilm in a self-serving attempt to use political pressure to accomplish what its own lack of managerial effort and failed marketing strategies have not been able to accomplish. What is most troubling about Kodak's action is not that it attempts to tarnish Fujifilm with false allegations of anticompetitive practices, but that it attempts to exploit growing tensions between the U.S. and Japan on trade issues to the detriment of a crucial bilateral relationship. Fujifilm has no desire or intention to contribute to the deterioration of what many commentators deem the most important bilateral relationship in the world. Kodak's management, however, seems to view the bilateral tensions as an opportunity for Kodak to gain through the political process what it has been unable to gain through the competitive process.

We strongly urge the U.S. Trade Representative, in its investigation of Kodak's complaint, to carefully study our documentation and verify its accuracy, rather than to simply cooperate with Kodak and accept its irresponsible petition as the truth.

Fujifilm has no need to conceal or distort the facts. We are confident that the facts will speak for themselves and make it clear to all that it is not Fujifilm nor MITI nor the JFTC, but Kodak, itself, that has been and continues to be in control of its fate in the Japanese market.

We hope that both Americans and Japanese will look at the facts. We hope that the U.S. Trade Representative will look at the facts. Finally, we hope that the media will look at the facts. If the facts are examined closely, there is no merit to Kodak's petition.

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