Amazon’s Tokyo Offices Raided in Potential Antitrust Scandal

amazon-amzn-logoRetail giant Amazon.com, Inc. (NASDAQ:AMZN) is in hot water with Japanese regulators over alleged antitrust practices.

From the Wall Street Journal:

Amazon Japan’s offices in Tokyo were searched by the Fair Trade Commission on suspicion of violating antitrust laws by forcing retailers to favor its e-commerce service over rival services, an official of the agency said Monday.

A spokesman for the antimonopoly watchdog confirmed an earlier report by the Nikkei business daily, which said the Japanese arm of e-commerce giant Amazon.com Inc. allegedly forced retailers on its site to set prices for their products lower than on other sites.

The spokesman declined to provide further details, including when the search took place.

A spokeswoman for Amazon Japan declined to comment.

Like the U.S., Japan has very strict laws to prevent companies from engaging in anticompetitive practices like price fixing.

Japan is a very large market for the company, and its contribution to AMZN’s overall revenue is on the rise. According to Reuters, “Amazon Japan’s website booked net sales of $8.3 billion last year, equivalent to 7.7 percent of Amazon.com’s worldwide net sales. By comparison, main rival Rakuten Inc recorded e-commerce revenue in Japan of 263.9 billion yen ($2.9 billion) in the same period.”

Amazon has also faced similar scrutiny in Europe, where it also allegedly forces its retailers to set certain prices to try and undercut its rivals.

Amazon shares rose $1.67 (+0.22%) in premarket trading to $767.65. The stock has gained 13% since the start of 2016, nearly doubling the return of the benchmark S&P 500 in the same period.

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