December 24, 2019

Rakuten, a major Internet shopping service company, will start "free shipping" from March of next year for all orders over a certain price level and will impose shipping charges on shop owners, sparking criticisms and arousing discontent from many shop owners.

Claiming that Rakuten's dictatorial rules have gone beyond their limit, these shop owners in October formed a Rakuten Union and began standing together against the free shipping service.

Those shop owners argue that the Rakuten practice constitutes "abuse of dominant bargaining position" which is prohibited under the Antimonopoly Law, demanding that the Fair Trade Commission take appropriate action.

Many shop owners at the Rakuten mall have long been suffering from Rakuten company policy: high commission rates, referred to as a "Rakuten trap"; unilateral changes in the terms of transactions; the introduction of a fine system; and various other acts which force them to accept further subordination. On top of that, Rakuten is now imposing free shipping charges on them. "Rakuten may bankrupt many shops," owners participating in the Rakuten Union emphasize.

The "contract business" tactic makes it possible for Rakuten to unilaterally decide terms and conditions for opening up online stores under Rakuten rules and regulations. Rakuten offers shop owners a platform for the Internet mail-order business, and the owners cannot run their businesses using Rakuten's system unless they agree to the contract terms.

Rakuten Union leader Katsumata Yuki, 32, said, "Many online stores will go bankrupt if we have to cover shipping expenses on our own."

The union's legal advisor, Kawakami Yoshihito, said, "Shipping costs are something that someone must pay. In the Rakuten case, shop owners are to pay. Rakuten unilaterally changes terms and conditions, often in disadvantageous terms for these owners who are in a vulnerable position. However, this amounts to a violation of the Antimonopoly Law for abuse of dominant bargaining position. Rakuren conducts the acts in breach of the law, but the Fair Trade Commission has said nothing. And, out of fear of retaliation, small business owners have not been able to raise their voices of discontent. That is why they established their union and hope to change things."