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Amazon Japan's shift seen spurring debate on fair competition

Antitrust watchdogs testing waters of e-commerce regulation

TOKYO -- Amazon Japan's decision not to demand the lowest prices from vendors in response to an antitrust probe likely will spark industry debate on maintaining a level playing field versus improving consumer convenience.

The Japanese arm of the U.S. e-commerce giant has decided to eliminate the so-called most-favored nation clause, which has forced vendors to guarantee prices and a selection comparable to those offered on rival e-commerce sites.

Many experts agree that the clause itself does not violate the law. It has been a common practice in the retail and other industries as a means of offering the best price and lineup.

But given Amazon's unparalleled public recognition and ability to attract customers, concern had grown that fair competition may suffer if the company always offers the best price and selection. Antitrust authorities in Japan and elsewhere have seen the clause as problematic.

This highlights the nature of online services, in which one player can parlay its leading market share into continued market dominance. European antitrust investigations over the past few years have targeted online services, going after e-book sales, hotel booking and online auto insurance.

Yet making a clear-cut judgment about Amazon's practice is difficult, because companies like Amazon have been the drivers of growth in online marketplaces. Antitrust watchdogs find themselves in uncharted waters in attempting to navigate the new world of online services. Convenience versus competition, and the degree to which authorities should meddle in private-sector markets, will be among the focal points of the debate.

(Nikkei)

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