Business

Manipulation of search results may violate antitrust law, says Japan's FTC

JIJI

The Fair Trade Commission said in a survey report Thursday that the practice of online shopping site operators prioritizing products made by themselves or their affiliates in users’ search results could be in violation of the anti-monopoly law.

The antitrust watchdog will notify shopping site operators of the potential violation in order to promote the development of fair competitive environments.

The FTC survey on online shopping and smartphone app sales was part of government efforts to toughen regulations on information technology giants.

The government plans to submit a bill to promote transparency in transactions involving information technology giants to next year’s ordinary session of the Diet. The FTC survey results will be reflected in the bill.

Firms such as e-commerce giant Amazon.com Inc. and app providers Google LLC and Apple Inc. could have superior power over companies using their services because of their overwhelming market shares. The report quoted one user company saying that it cannot help using major online shopping sites even if it has a complaint about them, because they can attract many customers.

The report pointed to the need to disclose the systems that determine search result rankings and prevent site operators from giving preferential treatment to themselves and affiliates.

If shopping site operators require user companies to boost product lineups or put their products on sale at lower prices than on other sites, those practices could also amount to a violation of the anti-monopoly law, the report said. App providers may also be breaching the law if they force customers to make settlements using their apps.

The FTC called on shopping site operators to listen to companies that use their services when they raise commission fees or make other changes to the terms of service, and to allow sufficient time for users to familiarize themselves with such changes.

The FTC survey covered a total of eight domestic and foreign companies engaged in online shopping and app sales, and 85 companies that use their services. The FTC has not disclosed the names of the firms.

The survey was not aimed at detecting law violations, the FTC said, while adding that it will conduct on-site inspections of individual companies if malicious cases are discovered.

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