TOKYO - Japan's antitrust watchdog on Wednesday approved a plan from the Japanese unit of Amazon.com Inc. to improve its practices following a probe into the online retailer for allegedly unfairly demanding that vendors cut the prices of products sold on its website.
Amazon Japan G.K. had been under scrutiny for a potential antitrust law violation for allegedly requiring vendors provide products at prices at or lower than those on other rival online retailing sites in order for them to be prominently featured.
The company, however, will no longer require the stipulation and will make finding goods easier for consumers with the cheapest on-site price given preference.
The latest development comes as Amazon faces a lawsuit in the United States filed by the Federal Trade Commission and more than a dozen state attorneys general alleging that its actions deter other online retailers from offering prices lower than Amazon.
By submitting the reform plan, Amazon Japan has avoided being accused of violating the antitrust law by the FTC under the so-called commitment procedures, under which a company facing allegations is exempted from being slapped with orders to address the situation in exchange for voluntarily drawing up an improvement plan.
The Japanese watchdog welcomed "the situation being improved faster than other countries" that face similar issues.
The watchdog usually issues a remedial order after confirming a violation of the antimonopoly law. But it apparently decided that voluntary action by the retailer would bring a swifter resolution to the issue.
"We will endeavor to improve transparency and provide consumers with enough information to make their choices," Amazon Japan said the same day, adding that it would continue to hold constructive discussions with the watchdog.
"We will work to improve our customers' shopping experience," it said.
The Japanese unit of Amazon sells products under its name and through vendors via its Marketplace service. The same products are consolidated on the same page, with a slot offered for just one vendor as a recommendation to customers, which is displayed in the so-called buy box for quick purchases.
Until now, vendors were required to provide products at what Amazon Japan called a "competitive price" to get a buy box spot, meaning that the price tag had to be at or below prices compared with other ecommerce websites.
The system left vendors at risk of lower profits for the sake of a prominent placement on the website or of not being seen by consumers by not complying with Amazon Japan.
The FTC determined that online competition would be stifled if the cheapest products were continuously displayed on the Amazon website and ultimately put consumers at a disadvantage. It also viewed the company's practice of lowering prices at no cost as problematic.
Amazon Japan was also investigated in 2016 and 2018, but the company discontinued certain practices that were being looked into and was not found in breach of the law.
