KPPU Follows Up on Alleged Monopoly in Digital Trade Ecosystem

Jakarta (ANTARA) - The Indonesian Competition Commission (KPPU) is following up on a report submitted by the E-commerce Logistics Business Association (APLE) regarding alleged monopolistic practices and unfair business competition within the digital trade ecosystem. “The report was received on Wednesday (15/4) and is now entering the initial clarification stage,” said Head of Public Relations and Cooperation Bureau of KPPU, Deswin Nur, in Jakarta on Monday. Deswin Nur stated that every incoming report undergoes stages of clarification and preliminary investigation. This is done to assess administrative completeness and the sufficiency of indications of alleged violations against Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition. “KPPU will ensure whether the report meets the requirements to proceed to the next process,” he added. He further explained that if the clarification results indicate sufficient preliminary evidence, the case will proceed to the initial investigation stage. In this phase, KPPU is authorised to gather evidence, summon relevant parties, and delve into the structure and behaviour of the reported business actors before entering the examination or trial stage. However, they emphasised that the handling timeframe cannot be precisely determined as it depends heavily on the case’s complexity and evidence availability. “Nevertheless, all stages adhere to the time limits stipulated in KPPU regulations,” he said. Previously, the APLE report was submitted through legal representative Panji Satria Utama from Satya Law Firm, stating that the complaint stems from concerns over potential disruptions to the business competition climate in the digital trade sector. The reported entities include TikTok Pte. Ltd., TikTok Nusantara (SG) Pte. Ltd., and the TikTok Shop service integrated with Tokopedia. According to him, the respondents are alleged to operate a business model with vertical integration encompassing content distribution, recommendation algorithms, e-commerce platforms, payment systems, to logistics services, and this structure is deemed capable of creating comprehensive control over the digital trade value chain. Additionally, this integration model opens possibilities for anti-competitive practices such as predatory pricing, discrimination against logistics service providers, and market access restrictions for competitors. Furthermore, aggressive promotional strategies through large discounts, shipping subsidies, and other incentives are seen as potentially leading to loss-leading practices, namely selling below production costs to accelerate market dominance. The algorithm aspect is also highlighted because the recommendation system is considered capable of prioritising products within the internal ecosystem over competing platforms, thereby limiting visibility for other business actors. This complaint refers to the provisions of Law No. 5 of 1999 and Minister of Trade Regulation No. 31 of 2023, which among others regulate the prohibition of monopolistic practices and the separation between social media and electronic commerce. As a comparison, the complainant also mentions international precedents, including investigations into practices in the Amazon marketplace and the European Union’s decision in the Google Shopping case.