Reiko Aoki, Japan’s competition commissioner, recently said that online platform markets “may require a new antitrust approach” at the GAI conference, “Antitrust and Digital Platforms Around the World” in Washington, DC. March 28, 2019.
When it comes to the ‘new approach’, I believe more attention needs to be drawn to the asymmetric (locked-in) relationship between platforms and suppliers. Business users today become more and more dependent on platform-giants and such dependence gives platforms sufficient power to suppress competition by exploitation and/or exclusion.
That power can be named as “relativer Marktmacht steht” (Germany), “l’état de dépendance économique” (France), “stato di dipendenza economica” (Italy), or “superior bargaining position” (“거래상 지위” in Korea and “優越的地位” in Japan). Whatever the name is, the concern is for our free and fair market economy, inter alia, in today’s digital world (see, to that effect, Steinberg, 2019).
Reportedly, Japan’s competition watchdog recently started an antitrust probe into Amazon on the suspicion that it has abused its superior bargaining position over suppliers (business users) by requiring them to cover the cost of purchase points. Though after that probe Amazon announced it will withdraw the reward point plan, I think it’s only a matter of time before a real case comes out.
Indeed, last year, the authority raided Amazon on the ground that it unfairly forced suppliers to shoulder the cost of their products’ discounts and to pay a “collaboration fee” by employing its superior power.
Moreover, Kazuyuki Sugimoto, the chairperson of Japan’s competition authority, has repeatedly raised competition concerns over online platform businesses, inter alia, in terms of asymmetric relations between platforms and business users. In an interview with MLex, while recognizing the importance of quick and timely enforcement in fast-changing platform businesses where markets tend to tip, i.e. where strong positive network effects arise, he said “abuse of superior bargaining position may provide a path for competition policy to” cope with new competition challenges.
Of course, such a view is not at all unique to Japan (and Korea). Germany (the country that I always feel forced to refer to at least once in every single paper) also has embarked on the path of the 10th amendment of competition law that will sharpen and strengthen intervention against unilateral abuse of superior or relative market power (Schweitzer, et al., 2018).
I’m not fully for sure when and how superior bargaining power would be materialized and developed in competition law enforcement. Anyhow, the current movement of reform of competition law, in my view, is timely and very necessary.
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