Photo/Illutration Amazon Japan’s headquarters in Tokyo’s Meguro Ward (Asahi Shimbun file photo)

The Fair Trade Commission opened an investigation into Amazon Japan on Nov. 26 on suspicion the e-commerce giant violated antitrust laws by pressuring sellers to lower prices and use its services, sources said.

The investigation focuses on alleged practices by Amazon Japan, based in Tokyo’s Meguro Ward, involving its Marketplace platform.

Marketplace features a single priority slot for sellers known as the “buy box”—the literal box on a product page with the “Add to Cart” and “Buy Now” buttons. 

As most customers hone in on this part of the page to purchase something, the feature is essential for sellers to increase sales.

According to the sources, Amazon Japan is suspected of requiring sellers to meet certain conditions to secure the buy box. These include offering “competitive pricing” compared with other e-commerce platforms and using Amazon’s bundled services for storage, shipping, delivery and returns.

The FTC believes that “competitive pricing” effectively amounts to demanding price reductions.

Amazon Japan holds the largest share of the e-commerce market at 28.2 percent as of fiscal 2021, according to the Japan External Trade Organization (JETRO).

The FTC suspects the company’s demands constitute an abuse of its superior bargaining position and impose restrictive trade conditions since sellers are pressured to comply to secure the buy box. Both actions are prohibited under the Anti-Monopoly Law.

If sellers’ freedom to trade or fair competition among e-commerce platforms is hindered, product prices could remain high over the long term.

The FTC is also investigating U.S.-based Amazon.com Inc. and plans to gather information from sellers to further uncover the situation.

This is the third time that Amazon Japan has faced scrutiny from the FTC, following investigations in 2016 and 2018 for suspected violations of the same law.

In August 2016, Amazon Japan was suspected of pressuring sellers on its platform to set lower prices than those offered on rival e-commerce sites.

During the FTC’s investigation, Amazon Japan removed the contractual terms in question, leading the FTC to close the case.

In March 2018, the FTC investigated Amazon Japan for about two-and-a-half years on the allegation that it demanded “cooperation money” from suppliers when profit targets were not met.

Amazon Japan applied for a “commitment procedure,” proposing to voluntarily correct suspected violations and refund suppliers. The FTC approved the plan, allowing the company to avoid a violation ruling.

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