Photo/Illutration Rakuten Inc. headquarters in Tokyo's Setagaya Ward (Asahi Shimbun file photo)

The Fair Trade Commission on Feb. 28 filed a request with the Tokyo District Court to take urgent action to stop internet giant Rakuten Inc.'s new free shipping policy.

Rakuten plans to offer free shipping from March 18 despite repeated calls from the FTC to revise the policy.

The FTC searched Rakuten's offices on Feb. 10 and has been conducting its own investigation by questioning online mall sellers about the new policy.

But with the start of the new plan fast approaching, FTC officials apparently decided that they could not wait until their own investigation was completed before taking action against Rakuten.

The request calls on the Tokyo District Court to issue an emergency order to temporarily suspend the start of the new plan.

The request was made under the Anti-Monopoly Law. The court can order a temporary suspension if it feels a proposed action could constitute an illegal act and an emergency measure is warranted.

The FTC has asked Rakuten to revise the plan because it feels smaller sellers will be placed at a disadvantage because they would have to shoulder the shipping cost to remain in the Rakuten mall. The commission contends Rakuten is abusing its dominant bargaining position over the sellers.

But even if the district court orders Rakuten to suspend the start of the new plan, Rakuten could still avoid having the order implemented if it submits a deposit approved by the district court.

On the other hand, if Rakuten simply refuses to comply with the order and proceeds with the new plan, it could face a maximum fine of 300,000 yen ($2,750).

The last time such a request was submitted was in June 2004, which was the seventh such case since 1955. In five of those cases, the FTC position was backed totally or partially by the court.

In the two other cases, the targeted company revised its actions before the order was issued by the court and the FTC decided to retract the request.

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