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Fair trade body clears Amazon Japan of antitrust violations after concessions

The Japan Fair Trade Commission (JFTC) on June 1 cleared Amazon Japan GK, the Japanese branch of Seattle-based e-commerce giant Inc., of suspicions the firm violated antitrust laws.

The JFTC had been investigating Amazon Japan over allegations that the restrictions the firm places on sellers on its "Amazon Marketplace" e-commerce site, among other policies, constituted an antitrust violation. However, the commission stated that "suspicions of any violations have been resolved," after the company promised to renegotiate its contracts with businesses selling items through the Amazon Japan site.

According to the JFTC, Amazon required sellers to sign contracts requiring them to offer their items at the same price or cheaper than they did on the marketplace sites of rivals Rakuten Inc. and Yahoo Japan Corp. Furthermore, some contracts required sellers to offer the same number or more items through Amazon than they did on competitors' sites.

The promise to offer customers the best prices on the Amazon Japan site was called the "most favored nation" (MFN) clause, and Amazon checked to make sure sellers were fulfilling these contractual commitments.

The JFTC found that these contracts risked inhibiting sellers from offering goods on other e-commerce sites, and that the policy could distort fair competition and inhibit new market entries, among other problems. The commission subsequently conducted an on-site inspection of Amazon Japan's offices in August last year, and moved forward with an investigation of the firm's business practices.

In April this year, Amazon Japan committed to rectifying its seller contract policy, including doing away with the MFN clause and promising not to reinstate such a clause in the future. It also pledged to make reports on its implementation of new policies to the JFTC for the next three years.

The commission ruled on June 1 that these changes were "sufficient" to erase suspicions of antitrust violations. Amazon Japan stated, "We have re-examined our contract policy as part of our efforts to cooperate with the (JFTC) inquiry."

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