At the urging the industry minister of Japan, the country’s Fair Trade Commission will look at a new program announced by Amazon Japan that some suggest may be anti-competitive in nature. Depending on the Commission’s findings, Amazon may be forced to abandon the idea, which is a form of a consumer rebate program.
See more on Amazon’s troubles in Japan…
Perhaps as a result of a growing wave of suspicions about big, global tech companies in countries around the world, Amazon is facing new scrutiny in Japan of a consumer program it recently announced. The program would allow consumers to earn points on their purchases that would represent a partial refund of their purchases…sort of like the cash back rebate programs that many credit card companies offer.
According to Hiroshige Seko, Japan’s industry minister, the problem with the program is that Amazon intends to force vendors to pay the rebate. Given the volume of sales the company has, the rebate “will force vendors to shoulder a heavy financial burden,” according to a report by NHK.
Program Set to Start in Late May
Amazon Japan plans to roll out the new program in late May. The program, it says, will return more than one percent of purchases back to customers. The company acknowledges that it plans to have suppliers pay the cost of this program.
But Seko has a different perspective on this plan. In a meeting with the press, he told reporters that if Amazon abuses its dominant position by overburdening vendors through unilateral changes to their contracts, “it would unfairly harm the competitiveness of small and medium-sized firms,” the NHK report said.
Does Amazon’s Program Violate Antitrust Laws?
For this reason, Seko asked Japan’s Fair Trade Commission to step in and review the impact on competition from this program to determine if it violates Japan’s antitrust laws. He also asked the Commission to act quickly to launch their review in advance of the program’s rollout.
As it turns out, the Commission is already engaged in an “ongoing probe” of Amazon, as well as other online-based companies, “to see if their dealing with suppliers and handling of personal data violate antitrust legislation.”
The report notes that the Commission will add this investigation to that ongoing probe.