PT Shopee International Indonesia (Shopee) and PT Nusantara Ekspres Kilat (Shopee Express) have acknowledged breaching Indonesian competition law, specifically Law No. 5 of 1999, according to the Indonesia Competition Commission, Komisi Pengawas Persaingan Usaha (KPPU). The admission came during a hearing at KPPU’s office in Jakarta, where Shopee and Shopee Express agreed to several behavioral changes.
The case centers on accusations that Shopee favored its courier service, Shopee Express, over other delivery services, violating Article 19(d) and Article 25(1)(a) of the Indonesian competition law. These articles pertain to anti-competitive behavior and discriminatory practices that can harm market competition.
The KPPU council, led by Chairman Aru Armando and members Gopprera Panggabean and Budi Joyo Santoso, conducted the hearing, which saw the attendance of representatives and legal counsel from both Shopee and Shopee Express.
In the hearing, Shopee admitted to the allegations and agreed to various points of behavioral change as determined by the KPPU council. These points will be formalized in an Integrity Pact of Behavioral Change, which both Shopee and Shopee Express will sign in the next hearing scheduled for July 2, 2024.
Shopee had initially proposed the changes on June 20, 2024, and these were subsequently approved by the KPPU council. The Integrity Pact includes conditions and obligations for behavioral change that Shopee and Shopee Express must adhere to.
The commission’s preliminary investigation revealed that Shopee allegedly prioritized Shopee Express for package deliveries, which led to discriminatory practices against other delivery services. Additionally, the KPPU noted concerns about a potential conflict of interest, citing an individual holding directorial positions in both Shopee Indonesia and Shopee Express, thereby influencing competitive dynamics.
The KPPU is also investigating Shopee’s competitor, Lazada, for similar violations. If Lazada is found guilty, it could face substantial fines amounting to 50% of net profit or 10% of total sales during the violation period.
The next hearing, where the Integrity Pact will be signed, is set for July 2, 2024. The public can follow updates on the case through the KPPU’s official schedule, available at KPPU’s website.
