Appliance Retailer Kojima Wins Court Fight over Prices May 10, 2004

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The latest legal battle between Japanese home electrical appliance retailers Yamada Denki Co. and Kojima Co. regarding advertising, in which both firms claimed to be the cheapest discount chain store in the Kanto region, was won in court by Kojima.

The win by Kojima is a severe blow to the business strategy and image of its rival.

In a complaint filed at the Maebashi District Court, Yamada Denki said that since October 2002, Kojima had been displaying advertising at the entrance of 38 of its stores claiming it was selling cheaper than its rival, even though some of its prices were higher than Yamada's.

Yamada's lawyers claimed this was misleading advertising and gave customers the false impression that Kojima was offering a greater discount. They added that the display bills, which measured one meter by 70 centimeters, had caused Yamada great damage, especially since it was clear that Kojima's prices were not cheaper than those of Yamada.

Kojima's counsel countered that the prices were checked before the bills were posted. "Even in cases in which its (Kojima's) prices were higher, it willingly discounted them further upon consumer requests," Kojima's counsel said.

Yamada had been seeking 196 million yen (approx. U.S. $1.7 million) in compensation for damages and a public apology. The demands were dismissed by the court on the ground that the bills could not be interpreted as saying that Kojima was selling products at much lower prices than Yamada. The court added it was a well-known fact that there had been a fierce price war between the two retailers.

Yamada Denki and Kojima, both based in northern Kanto -- the former in Maebashi, Gunma Prefecture, and the latter in Utsunomiya, Tochigi Prefecture -- have a long history of acrimonious price wars and have been involved in previous lawsuits based on comparative-pricing claims used in flyers. (The Yomiuri Shimbun)

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