The Fair Trading Commission has ordered Yamada Denki, operator of the nation's largest consumer electronics retail chain, to stop the practice of forcing employees from its suppliers to work at its outlets without compensation. The Maebashi-based firm had some 250 suppliers send about 168,000 employees to 361 outlets between November 2005 and May 2007. These employees worked at outlets that were newly opened or reopened after renovation.
The FTC decided that Yamada Denki took advantage of its superior position in relation to its suppliers in violation of a provision of the Anti-Monopoly Law that prohibits a superior party from forcing an inferior party to dispatch workers, reduce prices of merchandise, pay cooperation money, etc.
Yamada Denki has outlets in all the prefectures and its sales amounted to more than ¥1.7 trillion in the business year ended in March 2008. In 2005, it became the first consumer electronics chain operator whose annual sales topped ¥1 trillion. For suppliers, including major electronics makers, Yamada Denki is an important sales channel. They find it difficult to say "no" to demands by Yamada Denki. The Yamada Denki case should serve as a warning to other large-scale retailers that use their superior position in business relations with suppliers.