Amazon Japan under scrutiny in antitrust case

Amazon, known for selling items typically at prices that are as low or lower than prices found elsewhere, has been raided by the anti-monopoly watchdog, based on the suspicion that the US e-commerce company had allegedly forced retailers to set their prices lower on Amazon to give the site an advantage over rival e-commerce sites.

As per Nikkei Business Review, the Japanese unit of the Amazon forced conditions such as requiring retailers to sell products below the price they advertised on rival sites. Provisions in the country's anti-monopoly act prohibit companies from unfairly restricting the activities of others with whom they have a business relationship.

A spokesman for Japan’s Fair Trade Commission (FTC) on Monday confirmed the report by the Nikkei business daily, though declined to provide further details, including when the search took place.

Though Amazon declined to comment, Nobuyoshi Suzuki, a lawyer with expertise on Japan’s antimonopoly law, said the worst possible future outcome for Amazon Japan, apart from a “warning”, would be a cease-and-desist order issued by the antitrust regulator. Amazon can either appeal to the courts or accept the order and rectify its operations to ensure fair competition.

“It won’t lead to Amazon Japan having to cease its operations here, but rival businesses could sue Amazon for compensatory damages,” Mr. Suzuki said.

Amazon’s largest market is the United States, followed by Germany, the United Kingdom and then Japan. Amazon’s Japan business brought in about $8.3 billion in sales in 2015, about 7.7 percent of Amazon’s global net sales of $107 billion, according to the company’s annual report.

Last year also, in a similar case, European Union regulators had opened a formal investigation into Amazon’s ebooks business to see whether Amazon used its market power to force publishers to accept terms that harmed e-book purchasers.

The company said at the time it believed its agreements with publishers were legal and in the best interests of readers.