Rakuten’s free shipping policy suspected of breaking the law

The Japanese Fair Trade Commission said on Monday that Rakuten Group Inc. had committed acts suspected of violating antimonopoly law through the operation of its online shopping site.

The company has forced tenants at its Rakuten Ichiba shopping mall to waive delivery charges for purchases over certain amounts, according to the FTC.

The FTC said Rakuten is committed to ending such practices and respecting the intentions of tenants. The agency said it plans to end an investigation into Rakuten, possibly by the end of this year, after determining whether the company is implementing the improvement measures it has made. committed to take.

In August 2019, Rakuten announced plans to make free shipping for purchases of 3,980 yen or more, including tax, made through Rakuten Ichiba. For Okinawa Prefecture and Outlying Islands, the threshold has been set at 9,800 yen.

The move was opposed by tenants at Rakuten Ichiba, who are expected to bear delivery costs as part of the plan.

In February last year, the FTC conducted an on-site inspection of the company on suspicion the plan amounted to a violation of anti-monopoly law, which prohibits the abuse of a senior negotiating position.

That same month, the FTC requested an emergency court order to block the plan. It continued its investigation after Rakuten Ichiba began offering free deliveries the following month, leaving the choice to tenants.

Some Rakuten sellers began suggesting around March 2020, according to the commission, that tenants who did not join the free shipping program were unlikely to show up at the top of search results or get their contracts renewed. .

This apparently reflected the company’s goal of involving all tenants in the initiative, the FTC said.

An FTC investigation found that some tenants said their profits fell as they had to shoulder the costs to make free deliveries.

The agency said Rakuten is committed to not violating anti-monopoly law or allowing employees to pressure tenants. The company also promised to allow tenants who made free deliveries against their will to charge a fee again.

Rakuten Ichiba had more than 55,000 tenants as of Wednesday, according to the company. Of these, over 90% do not charge shipping costs.

“We concluded that this was the best way (for Rakuten) to take action for improvement and resolve the issues,” said an FTC official in charge of the matter.

Rakuten said it will take the FTC’s findings seriously, listen to tenants and users, and make efforts to improve its practices.

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