E-commerce leader Sea unfairly favoured its own delivery service, Indonesia says

JAKARTA – Indonesia’s antitrust authority is investigating South-east Asia’s e-commerce leader Sea for potentially unfairly favouring its own delivery service over other alternatives.

Online shoppers in Indonesia can choose the company to deliver their purchases, and Sea’s e-commerce arm Shopee set up an algorithm that prioritised its own service over other options, including local contenders, the antitrust watchdog known as the KPPU said in a hearing on May 28.

Shopee’s legal team, which was present at the event, is scheduled to respond at a follow-up hearing on June 11.

Indonesia, with about 280 million people, is a key growth market for Singapore-based Sea, as well as for its competitors such as ByteDance’s TikTok and Alibaba Group Holding’s Lazada.

If it is proven to have violated rules, Shopee will face potential fines and may need to change the way it presents delivery options to consumers.

Shopee is “committed to complying with all applicable regulations and legislation in the Republic of Indonesia”, a Shopee Indonesia spokesperson said.

As part of its supporting evidence, the KPPU said a Shopee director has also acted as a top officer at its delivery service arm since 2018.

“Based on this, PT Shopee International Indonesia has discriminated in the selection of shipping service companies that are automatically activated in bulk on the seller dashboard,” the antitrust watchdog said in a statement.

The agency is also investigating Lazada.

Antitrust penalties that the Indonesian authorities might impose on Alibaba’s Lazada, if found to have violated laws, would be lower than possible fines on Sea’s Shopee, which has four times more monthly active users in Indonesia.

Less than a third of Lazada’s monthly active users were in Indonesia against nearly half for Shopee as of April 30, based on Sensor Tower data. BLOOMBERG