Japan’s Power Companies Face Stiffer Fines in Wake of Customer Data Access Scandal

Yomiuri Shimbun file photo
The Economy, Trade and Industry Ministry sign outside its building in Chiyoda Ward, Tokyo

With more than 750,000 cases of unauthorized access of customer information by the major electric power companies, the Economy, Trade and Industry Ministry is considering stiffer penalties.

In 2016 when the retail electricity segment was fully liberalized, customers could choose their electricity provider from the main company that generates electricity or from so-called power producer and supplier (PPS) firms. Some PPS firms buy electricity from the major generating companies.

Since then, to ensure fair competition, it is prohibited for electric power companies’ sales employees from accessing personal information of PPS customers. This data is in the possession of power transmission companies, which are divisions or subsidiaries of the major power companies.

The unauthorized accesses to the PPS customers’ data were confirmed to have been made by seven electric power companies: Chubu Electric Power Co., The Chugoku Electric Power Co., The Kansai Electric Power Co. (KEPCO), Kyushu Electric Power Co., The Okinawa Electric Power Co., Shikoku Electric Power Co. and Tohoku Electric Power Co.

At KEPCO, it has been confirmed that the company’s employees used the customer data for their sales activities.

The ministry is looking into revising the Electricity Business Law, which stipulates that if an electric power company violates the law, the economy, trade and industry minister orders it to correct the problem. If the company disobeys the order, a fine of up to ¥3 million can be imposed.

Under consideration are raising the amount of the fine and imposing the fine without having to first issue an order.

The revision plan could see the law listing practical examples of cases that constitute unlawful acts. The ministry is also considering the clarification of activities subject to the penalties.

The aim is to compile a bill for the law revision after the ministry’s expert panel discusses effective ways of imposing penalties to prevent a recurrence.

The ministry’s Electricity and Gas Market Surveillance Commission is continuing its probes into the major power companies and aims at the earliest to complete its fact-finding by the end of this month.

After that time, the ministry aims to begin full-fledged consideration of stiffening the penalties.