Havoc broke out as Japan’s Fair Trade Commission raided the office of Amazon Japan on the notion of pressurizing retailers to offer products on more favorable conditions than on rival sites, the Nikkei business daily reported on Monday.
The paper did not specify the time of the raid.
Amazon Japan is apparently alleged of imposing conditions on retailers. For instance, forcing them to sell products at a lower price and if they were also advertising on other online shopping sites, the Nikkei said, citing sources with knowledge of the case.
A Fair Trade Commission spokesman said he could not confirm the report but added: “I won’t say the contents are incorrect.” This is an open statement leaving several questions unanswered but drawing a conclusion that this news is not false. Further investigation will reveal more about the case.
An Amazon Japan spokeswoman was asked for a comment, but she declined. Reports say she or other employees of Amazon Japan could not be contacted for an official press release or statement of any kind.
Offices of Amazon Japan
The offices of Amazon Japan have been searched meticulously following the allegations. The fact that the massive online retailing enterprise may have forced its sellers to set lower prices to compete with rival sites is considered unlawful in all respects. There are certain terms and conditions that have to be followed to ensure a fair and running business.
The Wall Street Journal reported on the raid Monday, following a report earlier in the day by the Nikkei business newspaper, which cited anonymous sources. None of the sources stated the time of the raid. A spokesman for the Japan FTC confirmed the Nikkei’s report on the raid, the Journal said.
Last year, the European Commission led an investigation into Amazon’s e-books business. Regulators there are investigating whether Amazon violated rules pertaining to competition from similar businesses. Neither Amazon nor the Japan FTC immediately responded to a request for comment.
Amazon Japan’s website is reported to have booked net sales of $8.3 billion last year alone which amounts to 7.7% of Amazon.com’s worldwide net sales. Its main rival RakutenInc generated revenue of 2.2 billion pounds during the same period in Japan.
Related news states that Germany’s Federal Cartel Office looked into Apple Inc and Amazon after complaints that publishers were being forced to work under unfavorable conditions for the marketing of audio books. This investigation began in November. Apple and Audible which is Amazon’s audio book business refused to comment on the news at that time.
Amazon however persists that it is confident its agreements with publishers were legal and in the best interests of the readers.
Another major office, Britain’s Office of Fair Trading was also involved in all this scrutiny along with Germany’s Federal Cartel Office.
They were suspicious of third party sellers trading on its ‘marketplace’ platform between the years 2012-2013. Later, both closed investigations after the company policies were changed that banned traders from selling products that were offered on Amazon at cheaper rates on other platforms.