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Antitrust watchdog to question Amazon Japan over new rewards program

  • February 26, 2019
  • , Kyodo News , 9:14 p.m.
  • English Press

TOKYO — Japan’s antitrust watchdog will question Amazon Japan over its plan to offer reward points to all products sold on its site, suspecting small merchants will be forced to shoulder the cost of the points, sources close to the matter said Tuesday.


The Japan Fair Trade Commission plans to start a full-fledged survey from Wednesday to determine whether the e-commerce operator gave smaller businesses and individual sellers the chance to negotiate the terms of the new system starting in May, they said.


Failing to do so could be deemed as an abuse of Amazon’s superior bargaining position over a counterparty, prohibited under the antimonopoly law. The company declined to comment on the issue.


Industry minister Hiroshige Seko said at a press conference Tuesday that it would be a “big problem” if Amazon Japan has unilaterally changed contracts by abusing its superior position and is “coercing excessive burden” on suppliers.


At present, customers only receive redeemable points when purchasing certain products such as those supplied directly from Amazon.


But Amazon Japan said Monday it is expanding the rewards program from May 23 to all products regardless of who sells them. The company has argued that the new program would not only be an incentive to consumers but will also help the sellers expand their business chances.


The latest development comes as part of the Japanese watchdog’s strengthened regulatory scrutiny over technology giants, including Google LLC, Amazon, Apple Inc. and Facebook Inc., amid criticism by some observers that they are hindering fair competition by becoming too powerful in the market.


Such major companies, also including Rakuten Inc. and Yahoo Japan Corp., are referred to as “platformers” in Japan, as they provide digital infrastructures or platforms, including search engines, social networking sites and e-commerce sites. They collect huge amounts of data to use them to develop new online services.


If Amazon Japan does not cooperate in responding to the inquiries from the regulator, it could face a mandatory investigation under the antimonopoly law.


The fair trade commission, the Ministry of Economy, Trade and Industry and the Ministry of Internal Affairs and Communications are also working on new rules to ensure that transactions between companies and platformers are conducted in a transparent and fair manner.

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