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Amazon Japan proposes refunding suppliers who were forced to bear discounts: Reports

Amazon package in a flower pot
Credit: Aditi Agrawal

Amazon Japan has submitted proposals to the country’s anti-trust regulator on how it will improve its practices that have been suspected of violating competition rules. In 2018, an Amazon unit in Japan was raided by the Japan Fair Trade Commission for demanding suppliers bear the cost of discounts on their products listed on Amazon. Amazon’s proposal includes a plan to refund suppliers who were forced to bear this cost. If the regulator accepts the proposals, Amazon will be exempt from penalties for alleged anti-trust law violations.

Competition probes in Italy, Canada, Germany, complaint in India

While Japan’s probe was kicked off with the 2018 raid, Italy’s anti-trust watchdog in March began investigating Amazon and eBay for hiking prices of products such as hand sanitisers, disinfectant gels, and masks, earlier this year as the coronavirus pandemic accelerated. The regulator has opened investigations into two of Amazon’s subsidiaries in Italy and Europe.

In India, a trade union of online sellers has filed an anti-trust suit against Amazon India with the Competition Commission for alleged predatory pricing and preferential treatment to select sellers. The body, All India Online Vendors Association (AIOVA), has alleged that Amazon India buys goods in bulk from manufacturers and then sells them at a loss to sellers such as Cloudtail, who then offer the same goods on Amazon.in at heavily discounted prices.

AIOVA has also raised concerns about Amazon using its own private labels, Solimo and Presto, to undercut sellers on the platform.

In Germany, the Federal Cartel Office is investigating Amazon for allegedly abusing its dominance while setting prices for products sold by third-party sellers. The regulator reportedly received multiple complaints about Amazon trying to influence such prices.

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Canada’s Competition Bureau already has a probe ongoing against Amazon for negatively impacting competition. Last month, it asked sellers to provide information that could help with the probe.

Bezos admitted to using seller data to aid Amazon labels

Amazon has also been suspected of leveraging the data insights it has on third-party sellers to its own benefit. In the US Congressional hearings on anti-trust violations by technology companies, Amazon was called out as having an inherent conflict of interest for selling its own products on its own platform, which directly compete with individual sellers. Congressman David Cicilline, chair of the house subcommittee on antitrust, said that Amazon controls 75% of all online marketplace sales and its market share is seven times the market share of its closest competitor.

In a major concession, Amazon founder and CEO Jeff Bezos told the subcommittee that although Amazon has a policy against using [not accessing] seller-specific data to aid its private label business, he “cannot guarantee that that policy has never been violated”. Further questioning indicated the possibility that Amazon has used aggregate data from third-party sellers to build their own competing private label products, something that Amazon’s Nathan Sutton had declined was happening in July 2019. Bezos revealed that Amazon employees have access to “highly detailed data”.

Also read: ‘The world needs large companies as well’: Jeff Bezos in his prepared congressional testimony

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