The Japan Fair Trade Commission (JFTC) raided Amazon Japan’s headquarters in Tokyo on suspicion of violating competition rules. According to Reuters, the company allegedly forced sellers to unreasonably lower prices. It is stated that this practice is requested in exchange for sellers’ products being positioned more advantageously on the platform.
This audit by the JFTC aims to investigate allegations that sellers on Amazon’s platform are forced to discount prices to highlight their products. According to The Japan Times, the investigation focuses specifically on Amazon’s “Buy Box” program. The program claims that sellers must offer competitive prices and use Amazon’s logistics and payment services to highlight their products.
Amazon Japan stated that they are fully cooperating with the authorities. But this investigation is just one of the antitrust investigations Amazon has faced around the world. In the USA, the Federal Trade Commission (FTC) and the Washington DC Attorney General’s Office have scrutinized Amazon’s anti-competitive practices. In the European Union, a comprehensive competition investigation against Amazon is expected to begin next year.
Such pressures by Amazon on sellers raise concerns that it creates unfair competition in both local and international markets. It is wondered what path the company will follow in order to comply with competition regulations and maintain market balance.
Amazon had experienced a similar situation before in Japan
A similar situation had occurred before in Japan. In 2018, the JFTC raided the company on the grounds that Amazon Japan required suppliers to share discount costs. At the time, Amazon closed the investigation by promising to improve its business practices.
Increasing monopoly scrutiny of Amazon around the world could cause the e-commerce giant to rethink its business models and relationships with sellers. Such inspections by competition authorities are of great importance in ensuring fair competition in the online retail sector.