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> Japan’s antitrust law prohibits a firm from abusing a superior bargaining position to illicitly make a business partner accept unprofitable trade conditions

> Japan’s antitrust law prohibits a firm from abusing a superior bargaining position to illicitly make a business partner accept unprofitable trade conditions If the trade conditions are really so unprofitable, why would the partner do business with you? This seems like ridiculously broad regulatory overreach. It sounds like it's illegal to be good at business in Japan.

CPLX 9y ago
> If the trade conditions are really so unprofitable, why would the partner do business with you? Because you have no choice. Because they are a monopoly. Which is the basic point of antitrust law.
- positr0n 9y ago
  Probably lack of business imagination on my part, so can you explain a situation where a company would be forced to do something that would lose it money? If you agree to a deal you must be getting some benefit out of it, right?
  - sho 9y ago
    > If you agree to a deal you must be getting some benefit out of it, right? Well I suppose they get to enjoy the benefit of not simply going out of business. The sharecropper working the land for his fief lord gets "some benefit" out of it, yes, in that he and his family get to eat and thus live. That doesn't make it a good situation.
  - CPLX 9y ago
    Sure. Suppose you live on a sunny carribean island and own a banana plantation and sell bananas for export profitably every year and live a normal life and raise a family. Then someone comes along and creates a shipping trust and corners the market on boats leaving the island and says sell your bananas to me at a loss or leave them on the docks to rot. Option A is to sell them at less than the cost it took for you to pay your workers to harvest them, option B is to watch them rot in a matter of days. Yeah sure the free market says that this will cause someone else to come along and create a shipping alternative. But the shipping trust knows this too. So they say if anyone tries to compete with us we'll drop the cost of shipping off the island to free temporarily until your new shipping business fails, and then go back to high rates. Nobody will finance the new shipping company given this predicament, so they can't even get enough money together to buy a boat. Meanwhile, the trust is making a total killing selling bananas at premium prices while buying them below cost, rapidly building a war chest to permanently be able to outlast even a well funded upstart shipping competitor in a price war. Yes the "free market" should solve this problem but the whole point is that trusts and monopolies subvert the free market and prevent market forces from functioning. Thus the role of government in stopping them.
    - icebraining 9y ago
      That sounds plausible in a world without contracts. But with them, the upstart will lock-in a few customers at a decent rate, which they will have to pay even when the big company drops theirs. A more plausible explanation here, in my humble opinion, is that it's only unprofitable for some of the suppliers. By squeezing the margins in the market, Amazon forces everyone except the leanest out.
      - CPLX 9y ago
        Not only is it plausible it's completely common. It's just a textbook description of how trusts work. The upstart can't lock in contracts when another well-funded monopoly company is engaging in predatory activities. The monopoly has market power which it can use to put competitors out of business and extort profits from suppliers. It's really just econ 101 and a pretty settled concept. Now there is certainly an argument to be made about the degree to which Amazon is actually doing this, but from a theoretical standpoint none of this is confusing at all, and there are numerous real world examples of this in action.
        icebraining 9y ago
        I admit my ignorance. Can you give me one of those examples?
  - wallace_f 9y ago
    The article mentions an example: >the JFTC found the firm had required suppliers sell items on Amazon Japan at the same or lower price as any listings they may have on on other platforms.
- JackFaker 9y ago
  Correct me if I'm wrong but this seems odd. I was under the impression that Rakuten had a larger market share than Amazon Japan.
  - suls 9y ago
    Not anymore.
    - chapill 9y ago
      Weird. Your account is 9 years old. You almost never comment. What leads you to believe Rakuten isn't still a force in Japan? https://www.emarketer.com/Article/Amazons-Efforts-Japan-Remain-Dogged/1016095 https://www.emarketer.com/Article/Amazons-Efforts-Japan-Rema...
      - felipelemos 9y ago
        Why his account age has any meaning in the discussion?
        chapill 9y ago
        I found it odd. I'm recognizing the importance of the issue to suls, as it drew this person to respond when the account goes for weeks without commenting on submissions. Do you find this sort of acknowledgement of a commenter's behavioral patterns odd? Why did you ask?
        throwaway2048 9y ago
        accusations of shilling are not allowed on HN, if you feel somebody is doing so, mail the moderators at hn@ycombinator.com, dont just sling crap at people, especially with such a flimsy premise.
        chapill 9y ago
        That's non-sequitur. I can't even imagine who you think suls would be shilling for. Are you accusing suls of shilling and asking me to report that for you? I've merely asked for elaboration and provided a recent article that seems to contradict suls statement. If there's market research indicating that Amazon is winning against Rakuten in Japan, that would be interesting to me.
lainga 9y ago
Trade conditions in Japan are generally more restrictive than in the US or UK (e.g. resale price maintenance, which has been ruled illegal in each, but is accepted as fact by consumers in Japan). The impenetrability of Japanese markets was a famous point of complaint by Americans in the "tiger" years of the 1980s. Without ascribing too much to history, the postwar Japanese economy has a history of accepting some inefficiency if it helps the community, and distrust of large, monopolistic corporations -- cf. the collective memory of the zaibatsus, which were dismantled after the war.
- cc439 9y ago
  While that specific application of that strategy is illegal in the US, manufacturers get around it by setting a MAP (Minimum Advertised Price) limit with their distributors. The most common example of this being used in practice is when you see an item on Amazon or Newegg with the price listed as "See Price in Cart". It's obviously easy to work around that legal loophole as a consumer (it's just 1-2 more clicks) but it's much harder for corporate customers who typically have to solicit a quote or multiple competitive quotes before making any significant purchase.

CPLX 9y ago

> If the trade conditions are really so unprofitable, why would the partner do business with you? Because you have no choice. Because they are a monopoly. Which is the basic point of antitrust law.

positr0n 9y ago
Probably lack of business imagination on my part, so can you explain a situation where a company would be forced to do something that would lose it money? If you agree to a deal you must be getting some benefit out of it, right?
- sho 9y ago
  > If you agree to a deal you must be getting some benefit out of it, right? Well I suppose they get to enjoy the benefit of not simply going out of business. The sharecropper working the land for his fief lord gets "some benefit" out of it, yes, in that he and his family get to eat and thus live. That doesn't make it a good situation.
- CPLX 9y ago
  Sure. Suppose you live on a sunny carribean island and own a banana plantation and sell bananas for export profitably every year and live a normal life and raise a family. Then someone comes along and creates a shipping trust and corners the market on boats leaving the island and says sell your bananas to me at a loss or leave them on the docks to rot. Option A is to sell them at less than the cost it took for you to pay your workers to harvest them, option B is to watch them rot in a matter of days. Yeah sure the free market says that this will cause someone else to come along and create a shipping alternative. But the shipping trust knows this too. So they say if anyone tries to compete with us we'll drop the cost of shipping off the island to free temporarily until your new shipping business fails, and then go back to high rates. Nobody will finance the new shipping company given this predicament, so they can't even get enough money together to buy a boat. Meanwhile, the trust is making a total killing selling bananas at premium prices while buying them below cost, rapidly building a war chest to permanently be able to outlast even a well funded upstart shipping competitor in a price war. Yes the "free market" should solve this problem but the whole point is that trusts and monopolies subvert the free market and prevent market forces from functioning. Thus the role of government in stopping them.
  - icebraining 9y ago
    That sounds plausible in a world without contracts. But with them, the upstart will lock-in a few customers at a decent rate, which they will have to pay even when the big company drops theirs. A more plausible explanation here, in my humble opinion, is that it's only unprofitable for some of the suppliers. By squeezing the margins in the market, Amazon forces everyone except the leanest out.
    - CPLX 9y ago
      Not only is it plausible it's completely common. It's just a textbook description of how trusts work. The upstart can't lock in contracts when another well-funded monopoly company is engaging in predatory activities. The monopoly has market power which it can use to put competitors out of business and extort profits from suppliers. It's really just econ 101 and a pretty settled concept. Now there is certainly an argument to be made about the degree to which Amazon is actually doing this, but from a theoretical standpoint none of this is confusing at all, and there are numerous real world examples of this in action.
      - icebraining 9y ago
        I admit my ignorance. Can you give me one of those examples?
- wallace_f 9y ago
  The article mentions an example: >the JFTC found the firm had required suppliers sell items on Amazon Japan at the same or lower price as any listings they may have on on other platforms.
JackFaker 9y ago
Correct me if I'm wrong but this seems odd. I was under the impression that Rakuten had a larger market share than Amazon Japan.
- suls 9y ago
  Not anymore.
  - chapill 9y ago
    Weird. Your account is 9 years old. You almost never comment. What leads you to believe Rakuten isn't still a force in Japan? https://www.emarketer.com/Article/Amazons-Efforts-Japan-Remain-Dogged/1016095 https://www.emarketer.com/Article/Amazons-Efforts-Japan-Rema...
    - felipelemos 9y ago
      Why his account age has any meaning in the discussion?
      - chapill 9y ago
        I found it odd. I'm recognizing the importance of the issue to suls, as it drew this person to respond when the account goes for weeks without commenting on submissions. Do you find this sort of acknowledgement of a commenter's behavioral patterns odd? Why did you ask?
        throwaway2048 9y ago
        accusations of shilling are not allowed on HN, if you feel somebody is doing so, mail the moderators at hn@ycombinator.com, dont just sling crap at people, especially with such a flimsy premise.
        chapill 9y ago
        That's non-sequitur. I can't even imagine who you think suls would be shilling for. Are you accusing suls of shilling and asking me to report that for you? I've merely asked for elaboration and provided a recent article that seems to contradict suls statement. If there's market research indicating that Amazon is winning against Rakuten in Japan, that would be interesting to me.

lainga 9y ago

Trade conditions in Japan are generally more restrictive than in the US or UK (e.g. resale price maintenance, which has been ruled illegal in each, but is accepted as fact by consumers in Japan). The impenetrability of Japanese markets was a famous point of complaint by Americans in the "tiger" years of the 1980s. Without ascribing too much to history, the postwar Japanese economy has a history of accepting some inefficiency if it helps the community, and distrust of large, monopolistic corporations -- cf. the collective memory of the zaibatsus, which were dismantled after the war.

cc439 9y ago
While that specific application of that strategy is illegal in the US, manufacturers get around it by setting a MAP (Minimum Advertised Price) limit with their distributors. The most common example of this being used in practice is when you see an item on Amazon or Newegg with the price listed as "See Price in Cart". It's obviously easy to work around that legal loophole as a consumer (it's just 1-2 more clicks) but it's much harder for corporate customers who typically have to solicit a quote or multiple competitive quotes before making any significant purchase.