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Amazon Japan investigated for demanding 'cooperation payments'

Antitrust watchdog suspects market dominance used to pressure suppliers

Amazon Japan's logistics center in Kawasaki, Kanagawa Prefecture.

TOKYO -- Amazon Japan is being investigated by the country's antitrust regulator on allegations of asking vendors for a percentage of their sales revenue.

According to sources, the Japanese arm of the U.S. e-commerce giant began requesting its vendors contribute "cooperation payments" from around 2017, claiming that the contributions would be used for system upgrades and other improvements. The requested payments ranged from a few percent to well over 10% of sales prices.

The company is also alleged to have requested vendors help absorb the costs of discounting goods.

Amazon Japan has been struggling with rising shipping and other operational costs.

The Japan Fair Trade Commission conducted an on-site investigation at Amazon Japan's office on Thursday on suspected violation of the Antitrust law.

The watchdog suspects the company of using its dominant position in the country's e-commerce market to pressure suppliers, making it virtually impossible to refuse the request. The regulator intends to clarify the details of the payment procedures.

Amazon Japan said on Thursday that it is "fully cooperating" with the investigation.

In February, Nikkei reported that Amazon Japan was seeking payments from its suppliers to cover the cost of sales system upgrades and other expenses. Amazon is reportedly already using a similar system in the U.S.

Amazon Japan has previously been the subject of investigations surrounding the so-called most-favored nation clause, which required vendors on its website to offer the same or better prices and product lineups than what they offer on rival marketplaces. The regulator closed the investigation in June 2017 after Amazon Japan agreed to delete the clause.

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