Business / Tech

Ruling LDP calls for law to prevent tech giants strong-arming vendors in Japan

Kyodo, JIJI

The ruling Liberal Democratic Party on Thursday urged the government to consider a new law obliging technology giants such as Amazon.com Inc. and Google LLC to disclose contract terms with vendors using their sites.

The set of proposals compiled by the LDP urged the government to require the tech giants, also including Facebook Inc. and Apple Inc., to clarify the rules of transactions and to notify the vendors in advance when they intend to change them.

The panel of the party’s Research Commission on Market Competitiveness Policy also requested that they respond appropriately to any complaints from vendors.

Concerns have been raised that the tech groups are abusing their dominant position with regards to smaller companies using their platforms, and that they are collecting customers’ personal data without gaining sufficient consent or disclosing how the information will be used.

The latest move comes a day after antitrust watchdog Japan Fair Trade Commission said its survey showed that some 50 percent to 90 percent of vendors using sites run by Amazon, Apple, Google, Rakuten Inc. and Yahoo Japan Corp. said their contracts have been changed without prior negotiations.

The poll showed that 93.2 percent of suppliers on the e-commerce site run by Rakuten said they have experienced unilateral contract changes. Similar responses were collected from 81.4 percent of vendors for Apple, 73.8 percent for Google and 72.8 percent for Amazon.

Among venders whose items failed product screenings, 64.0 percent of those on Amazon.com, 70.0 percent of those on Rakuten and 85.7 percent of those on Yahoo Japan said that they had received no explanations on the reasons for the rejections.

Nearly 70 percent of Amazon and Rakuten vendors expressed dissatisfaction with the lack of explanations.

The internet survey was conducted between Feb. 27 and March 26, collecting 867 responses. The JFTC said it will continue its probe, holding interviews with the large tech firms.

The commission has already raided the Japan offices of some platforms such as Amazon, which allegedly violated antitrust laws by having vendors shoulder part of the costs to cover discounts it applied to goods.

The commission also said in a separate survey that of some 2,000 consumers polled, 75.8 percent “have concerns” about the way the tech companies collect and manage personal information and data.

The government is expected to soon compile new rules to ensure more transparent transactions between platform providers and vendors.