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It would be unacceptable if a global tech giant demanded unfair price reductions from its business partners. It is hoped that the Japan Fair Trade Commission will conduct a thorough investigation and take strict action.
The JFTC has conducted an on-site inspection of Amazon Japan, a major online shopping operator, on suspicion of violating the antimonopoly law.
Amazon Japan is said to have engaged in activities such as forcing businesses to lower the selling prices of products they listed via the “Amazon Marketplace” service of its online shopping site. It is also suspected of forcing them to use logistics services operated by Amazon Japan.
The antimonopoly law prohibits companies in a position of superiority from inflicting disadvantages on their business partners as abuse of a “superior bargaining position.” Acts such as unreasonable demands for lower prices, delays in payment and imposing the burden of monetary contributions are deemed problematic.
Amazon Japan was also subjected to on-site inspections in 2016 and 2018 on suspicion of violating the antimonopoly law, and this is the third time the company has come under scrutiny. To have apparently disregarded laws and regulations many times repeatedly cannot be overlooked. It is hoped that the JFTC will gather information from a wide range of sellers to clarify the actual situation.
Amazon Japan’s online shopping site allows companies and individuals to list a variety of products, including daily necessities, clothing and food. When a user searches for something they want to buy with a smartphone or other device, only one recommended product is displayed more prominently on the screen.
Amazon Japan is believed to have demanded lower prices than those listed on other competing sites, and when sellers refused to do that, they were excluded from the recommended products list. For the sellers, this is a matter of life and death, as the number of views for their products could decrease and the volume of their sales could drop dramatically.
Many of the sellers are small and midsize companies and sole proprietors, and they are highly dissatisfied with Amazon Japan’s refusal to discuss the terms of transactions. If Amazon Japan unilaterally imposed transactions that did not ensure an appropriate profit, it would be in clear violation of the antimonopoly law.
Amazon Japan’s online shopping site has a large market share in Japan and is in an overwhelmingly strong position. Sellers may have had no choice but to comply with the demands because it is difficult to switch to other sites.
The size of the domestic online transaction market for consumers reached about ¥25 trillion in 2023. It is highly important to develop it as a healthy market.
The same problem is occurring in the United States and Europe. The JFTC reportedly also intends to issue an order to the U.S. parent company, Amazon.com, Inc., to submit a report on information necessary for the investigation. The antitrust watchdog must promote the exchange of information with overseas authorities and strengthen surveillance.
