Issues found with power imbalances in contract negotiations, low compensation, order cancellations

The Japan Fair Trade Commission published on December 24 its results of a survey it conducted into the business environments for the anime and film industries.

For anime, the Japan FTC studied the transactions between production companies and primary contractors, between primary contractors and subcontractors, and between production companies and freelancers, and identified problematic and potentially illegal behaviors during the contract stage, the manufacturing stage, and the payment stage.

At all three levels of transactions, the survey found issues with insufficient or delayed disclosures of contractual terms, and issues with low compensation (with the terms being worse for subcontractors and freelancers). In addition, the agency found issues with abuse of power from primary contractors toward subcontractors, and from production companies toward freelancers, with payment terms being unilaterally decided on by the primary contractors and production companies with little or no ability for negotiation of terms from subcontractors or freelancers, respectively.

The research also found order cancellations across all levels of transactions. In addition, the study found issues with delayed payments and reduced payments, and non-payment for retakes or additional costs incurred due to extended production periods. The survey also found issues with a lack of surcharges for rushed orders with short deadlines.

The research highlighted in both the film and anime industries the concentration of rights and power in the hands of clients and the unstable positions of contractors and creators.

The survey stated 89.4% of film directors and staff, and 52.1% of animators said they were not satisfied with their current pay, with many complaining compensation fell short of rising living costs.

The Japan Fair Trade Commission stated it has disseminated this report to member companies in production committees, production companies, freelance associations, and other related companies in order to prevent problematic behavior.

The Japan FTC along with other relevant government agencies will also monitor the progress efforts of relevant businesses, and will "take strict and appropriate measures" against any entity found to have violated the Anti-Monopoly Law or other related laws. The agency will also use the contents of the report to create and publish guidelines about practices that may violate the Anti-Monopoly Law, subcontracting laws, and laws about transactions between freelancers and businesses.

The Japan FTC’s investigation began in January 2025, and surveyed 130 companies and 165 freelancers, and also interviewed production companies, industry groups, freelancers, production committee members, lawyers, and scholars.

Sources: Japan Fair Trade Commission, The Asahi Shimbun (Yoshikatsu Nakajima, Shiki Iwasawa), DenFamiNicoGamer