Photo/Illutration Yuki Katsumata, center, who heads Rakuten Union, a group of small and midsize merchants on the Rakuten shopping mall, speaks at a news conference in Tokyo’s Chiyoda Ward on Jan. 22. (Hiroshi Nakano)

Sellers on the Rakuten shopping mall on Jan. 22 petitioned the Fair Trade Commission (FTC) to deliver a strong message to the e-commerce giant ordering it to rescind its new free shipping policy.

Rakuten Union, a group of small and midsize merchants on the online shopping mall operated by Rakuten Inc., submitted 1,766 signatures from those opposing the new offering, which will start in two months.

“We the sellers cannot accept Rakuten drawing a line in the sand for free shipping without shouldering some of the burden, not even 1 yen,” said Yuki Katsumata, who heads the union, after visiting the FTC office in Tokyo’s Chiyoda Ward.

The union also asked the FTC to issue a cease and desist order against Rakuten.

Katsumata and other members of the union handed the collected signatures to FTC officials behind closed doors.

According to the union members, an FTC official said the commission would take action in accordance with the law.

The policy guarantees free shipping on orders of 3,980 yen ($36) or more, including tax, with the exception of shipment from Okinawa Prefecture or remote islands.

The union, which said the plan would force sellers to shoulder the shipping costs, started a petition on its website in October urging the FTC to investigate the matter. 

Members of the union held a news conference after visiting the FTC office, where one seller outlined a possible scenario under the new free shipping policy.

The seller said the total sum of shipping costs and settlement and service fees would exceed gross profits.

“That won’t be practical as a business,” the seller said.

Rakuten has announced the new free shipping service will start on March 18.

The union members are considering filing for a court injunction, if the new policy takes effect as scheduled.

Rakuten announced the introduction of free shipping in January 2019. The company has insisted the new policy would make it easier for customers to understand the final purchase price and ultimately improve the website’s ability to attract more customers.

In August, the company announced the 3,980-yen standard and other details.

But the FTC warned Rakuten verbally that the new service “could violate the Anti-Monopoly Law” as it may constitute “abuse of its sellers.” 

Akihito Nohara, an executive officer of Rakuten, said the company will discuss how to respond to the union’s petition and other requests.

“We will continue to make efforts to obtain understanding from sellers,” he said. 

(This article was written by Hiroshi Nakano and Fumiko Kuribayashi.)