The Fair Trade Commission has ordered a unit of East Japan Railway Co. to stop blocking its retailing partners from passing the April 1 sales tax hike to their products.
The anti-monopoly watchdog issued the order Wednesday by making its first use of a special law passed specifically for purpose of ensuring that companies can appropriately transfer the cost of the tax hike, which rose to 8 percent from 5 percent, to their prices.
The subsidiary, JR East Station Retailing Co., operates Ecute shopping areas at five train stations, including Shinagawa and Omiya, that feature food and other shops.
The FTC said the JR unit unilaterally organized sales campaigns at the Ecute complexes after the tax hike and forced all 161 tenant firms to cut prices of some of their products by more than 3 percent at their own expense.
The FTC determined the practice broke the special law, which bans companies from forcing smaller firms to keep prices down.
Since receiving the order, JR East Retailing has decided to fully shoulder the retailers’ costs for the price cuts and said it will not repeat the practice.