The Japan Fair Trade Commission has started investigating online mall operator Rakuten Inc.'s plan to make marketplace merchants shoulder the costs of its proposed free shipping service, a source close to the matter said Wednesday.
The source said the antitrust watchdog has begun hearing from Rakuten merchants on suspicion the e-commerce giant's plan could violate the antimonopoly law.
Around 450 merchants presented a petition to the FTC last week, claiming Rakuten is abusing its dominant position by forcing them to shoulder the costs of free shipping for all orders exceeding ¥3,980 starting March 18.
Rakuten President Hiroshi Mikitani said Wednesday the company will go ahead with the plan.
"I'll make (the new system) work at any cost as we cannot grow without it," Mikitani said before Rakuten tenants at an event.
At present, the roughly 49,500 merchants on Rakuten's online shopping mall set shipping fees for items independently, with some providing free shipping.
The FTC has been stepping up scrutiny of Rakuten and other tech giants, including Amazon.com Inc., Apple Inc., Google LLC and Facebook Inc., to determine whether they are abusing their dominant market positions against smaller online retailers that depend on their platforms.