JFTC approves Amazon Japan’s plan to ease seller pricing rules

The Japan Fair Trade Commission (JFTC) has approved a business improvement plan submitted by Amazon Japan to ease the pricing requirements imposed on sellers, following an investigation into allegations that the company pressured sellers on its e-commerce website to lower prices.

The approval was given Wednesday under what are referred to as commitment procedures, a type of an administrative measure under which businesses that engaged in practices allegedly violating the antimonopoly law voluntarily submit improvement plans.

Under the procedures, the JFTC will not make a finding that Amazon Japan violated the antimonopoly law, but will monitor the implementation of the improvement plan for five years.

In its improvement plan, Amazon Japan said it would revise its current pricing rule under which sellers are required to match or undercut the lowest prices offered on other e-commerce websites for their products to be displayed as recommended items in prominent positions on its site.

The company will update its product display pages within six months so that products offered by sellers at the lowest prices on Amazon’s website are clearly displayed to consumers, even if the prices are not lower than those on competing websites.

In 2019, Amazon Japan began requiring sellers to offer products at or below “competitive prices” — a term the company uses to refer to the lowest prices listed on other e-commerce sites such as Rakuten Ichiba — for their goods to be displayed as recommended items, according to the JFTC.

Amazon Japan is one of the country’s largest e-commerce websites and holds a substantial market share. Most purchases on the site involve recommended items displayed prominently to consumers.

As a result, sellers had little choice but to comply with the requirement, with some reportedly selling products at a loss.

The JFTC determined that the condition restricted sellers’ freedom to set prices and could effectively force them to lower prices. It conducted an on-site inspection of Amazon Japan in November 2024, citing concerns that the practice could undermine fair competition among e-commerce websites.

The e-commerce giant’s “competitive price” policy has been the subject of lawsuits and investigations by antimonopoly authorities in the United States, Germany and Canada. The JFTC said the approval is expected to lead to improvements ahead of similar efforts in other countries.