Opaque trading practices have been substantiated by recent surveys. The government must urgently study measures to strengthen control of information technology giants.
The Fair Trade Commission has released an interim report of the results of surveys conducted on firms that do business with IT companies, and individuals who use services provided by the IT firms.
It is very significant that light is being shed on the actual trade conditions of IT companies, which are hard to grasp from the outside, through a detailed survey. The trade watchdog should use the survey results to help rectify the problematic practices.
The survey concerning online shopping was conducted mainly on online markets operated by three top providers, and answers were provided by 811 companies, including online shops. The percentage that answered "contract terms were changed unilaterally" amounted to 93 percent for Rakuten Inc., 73 percent for Amazon.com, Inc. and 50 percent for Yahoo Japan Corp.
If these three IT giants pressed online shops into accepting disadvantageous terms by taking advantage of their strong positions, it cannot be overlooked. Such a practice is suspected of amounting to abuse of a superior bargaining position, which is banned by the Antimonopoly Law.
Online shops are also greatly discontented over the search and display methods for goods on shopping websites.
The answer that "the criteria for deciding things such as the ranking of search results were opaque" was given by 69 percent of respondents for Rakuten and 57 percent for Amazon.
The market size of e-commerce transactions for individuals has expanded at an annual pace of about 10 percent to reach more than 16 trillion yen. Internet shopping sites, which are the core of e-commerce trade, are important for retailers. Ensuring fairness in trading is indispensable.
Establish new rules
The FTC also surveyed app stores that are used to acquire apps on smartphones.
The survey mainly covered two app store giants, Google LLC and Apple Inc., and 56 app development firms that responded to the survey. Those who answered that contract terms had been changed unilaterally accounted for 81 percent of respondents with regards to Apple and 74 percent for Google. It can be said that app stores face similar problems as those seen with online shopping sites.
In a survey of 2,000 individual people who use IT firms' services, 76 percent replied that they "have concern" about the collection and management of personal information.
The FTC needs to resolve anxieties held by online traders and consumers.
Amazon had tried to make it mandatory for online stores to provide reward points for users starting from May but later withdrew the plan. The FTC's launching of a probe into the plan on suspicion that it would force online stores to bear the cost of providing reward points could have served as a check on that move.
It is imperative to demonstrate a stance of not allowing unjust pressure to be imposed.
The Liberal Democratic Party, for its part, has compiled a draft proposal for the establishment of a new law that would obligate IT firms to ensure transparency in transactions. The proposals include one that calls for restricting improper use of personal data through the application of the Antimonopoly Law.
The government and ruling parties should join hands to proceed with making new rules in a way that does not undermine convenience.
(From The Yomiuri Shimbun, April 19, 2019)
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