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5.30.2017

Amazon Japan to Stop Enforcement of MFN After Fair Trade Investigation

Nikkei Reports Amazon Japan to Stop Enforcement of MFN Status After Investigation by Japan's Fair Trade Commission  

 Original article in Japanese on the 2017/5/30 14:08
Nihon Keizai Shimbun Online Version 

 Amazon Japan will stop enforcing MFN (most favoured nation status) on its suppliers of e-books and for Market Place sellers, whereby they must guarantee the same price and merchandising assortment on Amazon as with other competing sites. Japan's Fair Trade Commission investigated Amazon in August 2016 over this clause in their contracts to determine whether it would be an infringement on the Anti-Monopoly Law. A similar investigation was underway by the EU Commission as well.
Japan's Fair Trade Commission was investigating Amazon because if the absolute market leader forces their suppliers to offer them the most favorable trading terms, that could become a major impediment for competing businesses to enter the e-commerce market. 
If suppliers and consumers were forced to have no other options to sell/shop but Amazon, the Fair Trade Commission was preparing to rule that they were infringing on the Anti-Monopoly Law. However, as Amazon has now chosen to self-regulate, it is now anticipated that the Fair Trade Commission would delay their ruling indefinitely. 
Regarding Amazon's FMN clause in their contracts, the EU Commission is investigating its legality on digital books while other Fair Trade Commissions including that of the UK are looking into the practice in online travel agencies. In Japan, the investigation on Amazon is the first in terms of MFN. 
Amazon Japan's PR Manager declined to comment to the Nihon Keizai Shimbun (Nikkei) when contacted on 30 May 2017. 

Side note: 
According to sources who know the Amazon warehouses well, Amazon is planning to delete the MFN clause from the contracts for publishers supplying e-books and Amazon Market Place sellers.
The EU Commission closed its investigation on 4 May when Amazon.com of the US submitted a revision plan and a pledge that it will stick to the revision plan for five years. 

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