JFTC closes investigation for suspected abusive conduct relating to online free shipping program
Rakuten, one of the biggest online mall operators in Japan, announced in 2019 a plan to introduce a free shipping services program for shopping of JPY 3,980 or more on its online mall from March 2020, under which merchants using Rakuten's online retail platform would bear the shipping cost. In February 2020, the JFTC filed an uncommon petition for an urgent injunction order to the court to suspend the introduction of the program.
The JFTC withdrew the petition following Rakuten's decision to postpone the introduction of the program to all merchants. However, the JFTC continued its investigation and found that Rakuten forced some merchants to join the program by imposing certain disadvantages on them. For instance, the products of those merchants who did not want to join the program were ranked lower in search results. The JFTC suspected that this conduct might have constituted an abuse of superior bargaining position.
In response to the JFTC's investigation, Rakuten proposed certain voluntary remedial measures, including that Rakuten would respect the merchants' decision as to whether to join the program and would not impose any disadvantage on non-joiners. The JFTC concluded that Rakuten's proposed measures would resolve its concerns and decided to close the investigation.
This case was, somewhat controversially, closed without using the commitment procedure, which was introduced in December 2018 and has been used actively since 2020. JFTC officials said that the JFTC decided to accept Rakuten's voluntary proposal since it was most appropriate to resolve the anti-competitive issues and restore competition promptly. This case illustrates that competition issues surrounding the digital market remain a key priority of the JFTC.
For more detail, please refer to the JFTC's press release.
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