JFTC Makes Third Investigation on Amazon

Japan Fair Trade Commission (JFTC) made investigation on Amazon Japan with suspicion of violating Antitrust Law, with unfair trade, in selecting sellers on its website. Amazon is suspected to have coerced discount to the sellers for publishing their goods at “Cart Box.” It is the third time for this e-commerce giant to be investigated by JFTC. 

Cart Box is information appearing in the site of Amazon Market Place, in which a piece of goods is exclusively displayed for sales. In other words, it is the showcase on the website effectively as a recommendation from Amazon. Displaying goods on the corner gives the seller a great advantage against other sellers that deals with similar goods.

 

According to the reports, Amazon required the sellers, who want to submit their goods at Car Box, competitive price setting or using Amazon services for delivery, transport and returning. JFTC recognized that Amazon’s demand of competitive price-setting can be a kind of requirement of discounting, which can violate Antitrust Law. The demand of Amazon may be categorized as an abuse of dominant position or trading on restrictive terms, which the law prohibits.

 

Amazon has a policy that a sellers in Cart Box should be: major presenter with large number of goods, high performance without inferior product or delay in delivery, expected to receive certain amount of orders. JFTC suspects that Amazon, taking advantage of its dominant position against its presenters, tried to discount the goods cheaper than other rival internet markets.

 

For a producer that hopes to sell their goods as much as possible, Amazon is the most favorable market with huge number of customers. An easy way to increase its sales is to submit its products to Cart Box. For the products to be displayed in the Cart Box, it needs to set a competitive price, a synonym of discount. This can be a requirement of setting low price, which may cause extreme discount and high price setting without competition in the future.

 

JFTC also proceeds research on examples overseas. European Commission issued Amazon a statement of objection over its use of non-public business data in 2020. U.S. government and 17 states sued Amazon in 2023 with allegation that it unfairly promoted its own platform at the expense of third party sellers who rely on the company. JSTC is making research on trades of Amazon overseas.

 

JSTC had investigated Amazon Japan twice in the past. In 2016, Amazon was doubted as requiring its sellers lower price than they had offered to other website of e-commerce. It was also suspected to have demanded the makers payment for certain cooperation in the trade process. Amazon Japan has submitted its plan to reform its business. However, superiority of Amazon, 28.2 percent of share in e-commerce in 2022, is not expected to be changed by investigation on the antitrust case.

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