Rakuten Inc. said Thursday it will go ahead next month with its plan to make merchants on its online marketplace shoulder the cost of free shipping, despite an ongoing investigation by Japan's antitrust watchdog.

Rakuten President Hiroshi Mikitani said the new policy is essential for the future growth of the Japanese online giant and its marketplace merchants amid intensifying competition.

"Everyone aboard will go down with the ship if we don't commit to the change," Mikitani said during a press conference in Tokyo to report Rakuten's earnings for the business year ended December.

Rakuten reported a full-year net loss of 31.88 billion yen as it increased investment in its mobile phone business and logistics networks.

The Japan Fair Trade Commission launched an investigation last month on suspicion that the company, founded by Mikitani in 1997, was breaching the antimonopoly law by abusing its dominant position over smaller online retailers that depend on its platform.

Mikitani denied the allegation, saying most items on Rakuten's shopping site carry price tags that already include shipping fees and the new policy would affect only about 8 percent of orders.

He also said Rakuten would return fees to merchants wishing to withdraw from its online marketplace because of the new shipping policy.

The antitrust probe followed a petition filed with the watchdog in January by a group of around 450 merchants, who claim the new policy Rakuten would force them to bear shipping fees for all orders exceeding 3,980 yen ($36) starting March 18.

At present, the roughly 49,500 merchants on Rakuten's online marketplace set shipping fees for items independently.

==Kyodo

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