Rakuten’s free deliveries suspected of violating law

TOKYO (Jiji Press) — Japan’s Fair Trade Commission said Monday that Rakuten Group Inc. has committed acts suspected of violating the antimonopoly law through the operation of its online shopping site.

The company forced tenants on its Rakuten Ichiba cybermall to scrap delivery fees for purchases above certain amounts, according to the FTC.

The FTC said Rakuten has pledged to quit such practices and respect tenants’ intentions. The agency said that it plans to end an investigation into Rakuten possibly by the end of this year after determining if the company is implementing the improvement measures it has pledged to take.

In August 2019, Rakuten said that it planned to make deliveries free of charge for purchases of ¥3,980 or more, including tax, made on Rakuten Ichiba. For Okinawa Prefecture, southernmost Japan, and remote islands, the threshold was set at ¥9,800.

The move was opposed by Rakuten Ichiba tenants, who would have to shoulder the delivery costs under the plan.

In February last year, the FTC conducted an on-site inspection of the company on suspicion that the plan amounted to a violation of the antimonopoly law, which bans abuse of a superior bargaining position.

The FTC filed for an emergency court order the same month to block the plan. It continued its probe after Rakuten Ichiba began offering free deliveries the following month, giving tenants choice.

According to the FTC, some Rakuten sales staff began to suggest around March 2020 that tenants that did not join the free delivery scheme were unlikely to be displayed on the top of search results or get their contracts renewed.

This apparently reflected the company’s target of making all tenants take part in the initiative, the FTC said.

An FTC survey found that some tenants said their profits had fallen as they had to shoulder costs to make deliveries free of charge.

The agency said Rakuten has pledged not to violate the antimonopoly law or allow employees to put pressures on tenants. The company also promised to allow tenants that have made deliveries free of charge against their will to charge fees again.

Rakuten Ichiba had over 55,000 tenants as of Wednesday, according to the company. Of them, over 90 pct do not charge delivery fees.

“We’ve concluded that it is the best way (for Rakuten) to take improvement measures and solve problems,” an FTC official in charge of the matter said.

Rakuten said that it will take the FTC’s findings seriously, listen to tenants and users and make efforts to improve its practices.