22 August 2019
Amazon's Japanese unit has come under anti-monopoly investigation for the second time in two years. Photo: Reuters
Amazon's Japanese unit has come under anti-monopoly investigation for the second time in two years. Photo: Reuters

Amazon Japan again comes under antitrust scrutiny

Amazon’s Japanese unit has come under antitrust scrutiny for the second time in two years, with the company’s office getting raided by investigators from the nation’s competition watchdog.

Officials from the Fair Trade Commission (FTC), Japan’s antitrust agency, visited the headquarters of Amazon Japan on Thursday to check for possible violations of Japan’s Antimonopoly Act, the Wall Street Journal reports.

A government official declined to specify why authorities were investigating Amazon, but said that in general, the FTC was concerned about cases in which sellers of goods may face harm from spurning the demands of powerful retailers, the paper said.

The commission was interested in ways powerful online retailers can distort competition, reduce incentives to cut prices elsewhere and gain an advantage over other online shopping mall operators, the official said.

An Amazon Japan spokeswoman was quoted as saying that the firm is fully cooperating with the investigation.

Japan accounted for US$11.9 billion, or nearly 7 percent, of Amazon’s US$178 billion in global sales in 2017. That made it the third-biggest market for the company after the US and Germany, the Journal noted.

The US-based online retailer commanded the biggest portion of Japan’s e-commerce market in 2016, at more than 20 percent, according to a survey by the Japan External Trade Organization.

That scale makes it hard for sellers—already fighting for customers as the population shrinks—to refuse requests from Amazon, government officials have said.

The FTC closed a previous probe of Amazon Japan just nine months ago.

The watchdog said it found the firm had demanded that suppliers offer Amazon customers prices equal to or less than their prices on other online shopping sites such as those run by Rakuten or Yahoo Japan.

The practice could give Amazon Japan the broadest lineup of goods at the lowest prices and hinder competition, the agency said.

Amazon Japan said at the time that it promised Japanese regulators to stop requiring sellers to match the price offered on other sites.

The commission closed its probe in exchange, according to the Journal report.

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