The Nintendo DS, the handheld games console adored by millions across the globe, has become the focus of a price-fixing investigation targeting two of Japan’s largest electronics companies.

The headquarters of Sharp and Hitachi were searched yesterday by investigators from the Japan Fair Trade Commission (JFTC) as the monopolies watchdog tightens its grip on a corporate Japan riddled with unfair business practices.

The raids are thought to be a direct result of Japan’s recently enacted “whistle-blower law”, a significant legal change pushed through by the JFTC that grants amnesty to the first corporation within a price-fixing cartel to own up.

The raids on Sharp and Hitachi are understood to relate to an investigation into the pricing of the liquid crystal screens on the Nintendo DS — the machine that has sold about 65 million units since its launch.

When the DS was released in 2004, Sharp met 100 per cent of supply. A year later, as Nintendo struggled to meet soaring worldwide demand, Hitachi joined as a supplier of LCD panels.

It is at that point that the alleged price-fixing began, according to sources close to the investigation.

Sharp and Hitachi are thought to have reached an agreement that panel prices would remain stable, despite obvious competition between the two suppliers and the overall downward pressure on LCD panel prices.

It is not the first time that Sharp and Hitachi have been scrutinised by monopolies watchdogs in Japan, the US and the EU.

The two companies were part of an international investigation of LCD panel price-fixing in late 2006 that focused on screens used in televisions and PCs.

The alleged cartel at the heart of that investigation involved companies from Japan, South Korea and Taiwan.

The Japanese Government continues to tighten its anti-monopoly laws, and has recently proposed even more draconian reforms to drive out the “sickness” of collusive behavior between corporations.

The JFTC, which only recently was granted the weapons of arrest and fines in its battle with the cartels, is expected to be given even broader powers to fine and prosecute.

In a recent interview with The Times, Kazuhiko Takeshima, the chairman of the JFTC, said that consumers should expect to find their interests “actively protected” by the regulator — suggesting that mobile phones, food and other consumer goods would become the focus of future investigations.

Both Sharp and Hitachi confirmed that they had received visits from JFTC investigators, but declined to comment any further.

Explore Industry Sectors

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• Bank on the brink as recession fears worsen
• Persimmon takes housing sector job cuts to 4,500
• Savills hit as London house prices down 7.5%