Amazon Japan raided by anti-monopoly authorities

Amazon Japan has said it will collaborate with Japan’s Fair Trade Commission (JFTC) after the watchdog conducted an on-site inspection related to suspected violations of anti-monopoly laws.

The e-commerce giant is under suspicion of inappropriately urging vendors to lower their prices on its online shopping platform in return for better product placement, as first reported by Reuters, citing a source.

“We are cooperating fully with the [Japanese] authorities,” Amazon Japan spokesperson, Tomoko Inoue, told TechCrunch in an email statement.

The action concerns Amazon’s Buy Box system, which highlights one seller’s products as the preferred choice on a product page. Shoppers need to go to different pages to see products from different vendors so the Buy Box funnels shoppers’ attention to whichever products have been selected to be featured.

The tech giant has been accused of requesting “competitive pricing” (i.e. lower prices) vs competing e-commerce platforms in order for products to be featured in the Buy Box system, according to reporting by the Japan Times.

Moreover, sellers were allegedly asked to use Amazon’s internal logistics and payment services to be eligible for the Buy Box promotion.

Japan’s antitrust watchdog did not respond to our request for comment on the raid.

Other Buy Box probes

In recent years, Amazon has faced similar scrutiny by antitrust authorities elsewhere, including in the European Union and the U.K., over how it operates the Buy Box, among other issues of concern.

The e-commerce giant went on to offer commitments to EU regulators which settled their probe in December 2022. The U.K. investigation was also settled in this way in November 2023.

In both cases Amazon avoided any penalties as enforcers accepted multi-year pledges that it would apply “objectively verifiable and non-discriminatory conditions and criteria” for the Buy Box featured offer pick (in the case of the U.K. settlement). Although a U.K. class action-style lawsuit, filed in October 2022, is suing the company over the issue with a goal of extracting more than $1 billion in damages for local consumers it claims were harmed by Amazon’s action.

On home turf Amazon is also already subject to substantive antitrust action. The U.S. Federal Trade Commission and attorneys generals from 17 states filed suit back in September 2023 accusing the e-commerce giant of illegally stifling competition, including by meddling in the pricing of products on its platform. Last month a judge ruled the FTC can proceed — with a trial slated to be held in October 2026.

In a court filing associated with the case, which was made public in November 2023, the FTC claimed that Amazon.com, which has 1 billion items in its online store, was using a system that increased prices for U.S. households by over $1 billion. Amazon claimed in its own legal papers that they stopped using the program in 2019.

Elsewhere, the e-commerce giant could also face a fresh EU investigation next year, too. Reuters reported last week that the bloc’s authorities suspect it of giving preferential treatment to its own branded products on its marketplace — which would be a contravention of a ban on self preferencing it’s subject to under the Digital Markets Act (DMA).

If found guilty of violating the DMA Amazon could be fined up to 10% of its global annual sales.

Returning to Japan, this is not the first time Amazon has tangled with its competition authorities. In March 2018, the regulator raided Amazon Japan because it suspected the company of making suppliers pay part of the costs for selling their products at a discount on the website. The authorities went on to accept an Amazon Japan plan to improve its business practices in September of the same year.