Indonesia’s antitrust authority has raised concerns about the potential for monopolistic behavior resulting from TikTok’s acquisition of a majority stake in local e-commerce platform Tokopedia. The takeover, which was finalized late last year, is now under official scrutiny.
The Business Competition Supervisory Commission (KPPU) said on Tuesday that preliminary findings from an ongoing review suggest the deal could lead to unfair competition in Indonesia’s digital commerce sector. The KPPU emphasized that the dominance of the merged entity in both short-video advertising and online marketplace sales might result in market concentration that disadvantages smaller players.
TikTok, owned by Chinese tech giant ByteDance, merged its Indonesian e-commerce operations with Tokopedia — a prominent local online marketplace — in a deal valued at over $1.5 billion. The move aimed to reintroduce TikTok Shop in Indonesia after a government ban last year halted its direct e-commerce activities due to regulatory concerns.
Indonesia, one of TikTok’s largest markets globally, banned in-app e-commerce functions in October 2023, citing the need to protect traditional merchants and ensure compliance with consumer protection laws. The ban forced TikTok to seek local partners to relaunch its commercial operations under revised conditions.
The acquisition of Tokopedia by TikTok’s parent company, via a partnership with the Indonesian tech conglomerate GoTo, allowed TikTok to resume operations by combining local business expertise with its own digital ecosystem.
According to KPPU Chairman M. Afif Hasbullah, the regulator is still examining the full impact of the merger. He noted that there is a “high potential for monopolistic practices” unless TikTok and Tokopedia ensure that the combined platform operates with fair access to competitors and transparency in its algorithmic practices.
The KPPU has requested further documentation and clarification from the involved companies and stated that an in-depth investigation may follow depending on the response. The agency has the authority to impose sanctions or order structural changes if violations of competition law are confirmed.
In response, TikTok and GoTo issued a joint statement asserting their commitment to maintaining fair competition and supporting the Indonesian economy. They said the partnership aims to empower small and medium-sized businesses by expanding digital access, not stifling it.
However, local merchants and digital entrepreneurs have expressed worries that the dominance of TikTok-Tokopedia could erode competition, particularly in rural and mid-tier markets where platform access is already limited.
E-commerce analysts say that the outcome of this investigation could set a precedent for how Indonesia handles tech mergers in the future, especially those involving foreign firms with substantial digital influence. The decision will also be closely watched by regulators across Southeast Asia, where TikTok and other major platforms are expanding aggressively.
The KPPU’s review is expected to conclude in the coming weeks, after which a decision will be made regarding the legality and future conditions of the deal.
Source; Reuters
