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Amazon Offices Raided

The offices of US online giant Amazon have been raided over concerns that the Company is engaging in monopoly practises.

Japan’s anti-monopoly watchdog raided Amazon’s Tokyo headquarters for the second time in two years late yesterday, after complaints by Rakuten and Start Today — which operates the popular Japanese fashion portal Zozotown, shares in these companies have fallen by over 25% during the past six months with Amazon accused as being a contributor to the fall.

Japan is Amazon’s third-biggest market after the US and Germany and the threat it represents to local Japanese incumbents.

The Japan Fair Trade Commission is looking into whether Amazon has used its ever-increasing market clout to force suppliers to shoulder costs when it offers discounts in its online marketplace, according to a person with knowledge of the investigation.

In a statement late yesterday, Amazon said it was “fully co-operating with the authorities” but declined to provide details.
Authorities in Japan raided Amazon’s Japan office in the summer of 2016, as it was becoming clear the US giant was destined for the top position in Japanese ecommerce.

The JFTC ended that antitrust probe a year later after Amazon revised contracts that had required retailers to set their prices the same or lower than those on rival sites.

The UK Financial Times claims that Amazon may be more vulnerable to criticism of its business practices than some of its competitors in Japan because it is more likely to deal directly with suppliers.

Amazon’s largest Japanese rival, Rakuten, sells a large proportion of the goods on its site via third-party vendors.

The US company, by contrast, operates more like a traditional, large volume retailer and negotiates directly with many of its suppliers.

The investigation is likely to focus on whether Amazon unfairly pressured suppliers to cover discount costs that were not previously agreed.

Amazon, which first launched in Japan in 2000, overtook Rakuten to take the top spot in Japan’s online retail market two years ago.

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