Photo/Illutration A distribution center of Amazon's Japanese arm in Kawasaki, Kanagawa Prefecture (Kyota Tanaka)

Amazon’s Japanese arm will voluntarily cease asking merchandise suppliers to pay “cooperation money” when they are unable to meet Amazon's profit target, a dubious practice suspected of violating the Anti-Monopoly Law.

Amazon's decision came after the Fair Trade Commission (FTC) questioned the e-commerce giant, sources said.

In the past several years, the Tokyo-based company has been asking suppliers for the payments if they fail to meet the target through price cutting and other ways, according to sources.

Suppliers have also been billed by Amazon in other ways.

Some of the suppliers that agreed to pay such money felt obliged to do so because of Amazon’s far-reaching influence.

The FTC considered such conduct abuse of Amazon's dominant bargaining position and conducted an on-site inspection of the company in March 2018.

In response, Amazon has submitted a plan to antitrust officials, in which it says the company is willing to abandon such practices in the future and issue suppliers a refund comparable to the damages they incurred.

If the FTC accepts Amazon’s plan as an effective solution, the company will be spared from receiving an administrative punishment.

The FTC introduced the system of allowing business subjected to an investigation to escape punishment if they cease engaging in the allegedly illegal conduct, at the end of fiscal 2018. The system was established to speed up investigations and restore fair competition.

In recent years, the FTC has increased the level of oversight over giant IT companies, including Google, Apple, Facebook and Amazon, collectively known as GAFA.

Rakuten Inc., a Japanese rival of Amazon, is currently under investigation by the FTC.

Amazon's Japanese arm became a subject of FTC investigations in 2016 and 2019 over its “marketplace” shopping site.

The FTC ended both investigations after Amazon changed its policies and actions.

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