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Amazon.com, Inc. (AMZN) Tokyo Office Raided on Possible Antitrust Violations

Amazon.com Inc (NASDAQ:AMZN)

Amazon.com, Inc.  is suspected of violating antitrust laws in Japan. The company’s local office was searched by Japan’s anti-monopoly watchdog agency on their suspicion that the firm is forcing retailers to favor its e-commerce service over rivals. According to the reports, the Japan Fair Trade Commission recently raided the company’s offices in Japan to investigate whether the company forced retailers to sell products on more favorable conditions than on rival e-commerce sites, the Nikkei business newspaper reported on Monday.

Amazon.com Inc (NASDAQ:AMZN)

Sources close to the matter told the Nikkei that the anti-monopoly watchdog agency conducted an on-site inspection of the U.S. online retail giant, which allegedly imposed restrictions the commercial activities on vendors on its site by unfairly forcing them to favor its e-commerce website over rival sites.

In Japan, companies are not allowed to impose restrictions the commercial activities of others with whom they have a business relationship, according to the newspaper.

Amazon Japan

Japan is an important and biggest international market for the U.S. tech giant. Bloomberg reported that the U.S. e-commerce giant started its operations in the country in 2000, when it launched its website. The company now offers Prime membership in Japan, which includes video, same-day shipping and other add-on services for an annual fee.

Still, it wasn’t clear when the Fair Trade Commission conducted the raid.

According to a report published in The Wall Street Journal, Amazon competes with e-commerce company Rakuten and Yahoo Japan in Japan. Rakuten is the big player in the Japanese market.

Last year, Amazon Japan reported net sales of US$8.3 billion, equivalent to 7.7% of Amazon’s worldwide net sales. The company’s main rival Rakuten booked e-commerce revenue in Japan of 263.9 billion yen (US$2.9 billion) in the same period.

Amazon Practices Also Come Under Scrutiny in Europe

In Europe, Amazon.com, Inc.’s business practices toward retailers and e-commerce partners have also come under scrutiny in Europe, Reuters (via Channel News Asia) reported.

In November, Germany’s Federal Cartel Office started investigation into Apple and Amazon after publishers complained that the firm were forcing them to accept “unreasonable conditions” for the marketing of audiobooks.

Last year, the European Union begin an antitrust investigation into Amazon’s e-book business. The agency was examining whether clauses in contracts prohibited publishers from offering more favorable deals to the e-commerce company’s competitors.

Britain’s Office of Fair Trading and Germany’s Federal Cartel Office investigated the company’s conditions for third-party sellers trading on its “Marketplace” platform between 2012 and 2013. The investigations were closed after the company changed policies that banned traders from selling products offered on Amazon more cheaply elsewhere.

As we reported earlier, the UK’s Advertising Standards Authority (ASA) decided to ban two delivery ads of Amazon for misleading customers. The authority found that the two ads – offering ‘free UK delivery’ for orders of more than £20 – were unclear and misleading to customers, according to a report published on Marketing Week.

According to the report, the ads – seen in July 2015 – were related to the delivery charges for an electronic product sold by AmazonBasics. The U.S. e-commerce giant, according to the complainant, didn’t clarify which item would be available for UK delivery. They also said that the company failed to make the delivery charges clear.

In other news, Amazon.com, Inc.  has launched its first-ever branded cargo plane. The aircraft is a Boeing 767-300 plane that Atlas Air operates – Atlas Air is the same firm that provides cargo services.

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