TikTok denied its Tokopedia acquisition would lead to monopolistic practices but accepted some antitrust conditions, though its proposed revisions were rejected.
TikTok has denied that its acquisition of Indonesian e-commerce platform Tokopedia last year would result in monopolistic practices, though it agreed to several behavioral conditions proposed by antitrust investigators.
At a hearing today before the Indonesian Competition Commission, or KPPU, legal counsel for the Chinese social media giant rejected suggestions that the two shopping platforms would engage in anticompetitive conduct following the merger.
TikTok's local unit acquired a 75 percent stake in Tokopedia in January 2024 to maintain its e-commerce operations in Indonesia after the Trade Ministry banned social media platforms from facilitating transactions directly. Following the acquisition, TikTok Shop was integrated into Tokopedia’s operations, although the two platforms continue to operate separately.
Because the combined asset value and sales revenue of the merged entity exceed 5 trillion rupiah ($306.7 million), the deal triggered a mandatory post-merger notification to the KPPU, which was filed in March 2024. Last month, the KPPU announced that its investigators had concluded the transaction could lead to monopolistic practices and should therefore be subject to behavioral conditions.
These conditions include ensuring users have options when selecting payment and logistics providers; prohibiting tying and bundling practices involving specific service providers; and ensuring that TikTok account holders can promote products from other e-commerce platforms besides Tokopedia.
During today’s hearing, where TikTok delivered its formal response, counsel Farid Nasution argued that current practices on both platforms already meet these conditions.
“TikTok has always allowed users to promote products sold on other e-commerce platforms,” he said. “Consumers are free to choose from a variety of payment and logistics service providers on both TikTok Shop and Tokopedia.” “The current practice aligns with the spirit of the KPPU’s proposed commitments. There is no coercion for buyers to use any specific logistics or payment provider,” Farid added. “We are committed to continuing these practices to prevent tying and bundling.”
TikTok also confirmed it was prepared to comply with additional obligations, including submitting compliance reports over two years and providing documentation such as a list of logistics and payment partners, as well as agreements with merchants, vendors, and service providers both before and after the acquisition.
However, TikTok proposed a revision to the commitment not to employ bundling and tying practices, suggesting the phrase “that forces buyers to use certain logistics or payment methods” be added.
KPPU investigators rejected the proposed language, arguing that the original wording already captured the prohibition against tying and bundling.
“The addition introduces ambiguity and is unnecessary,”
a KPPU investigator said.
On the commitment to ensure that users remain free to promote products from other e-commerce platforms besides Tokopedia and TikTok Shop, the company proposed an additional clause emphasizing the need to protect user safety.
That proposal was also rejected by the investigators.
“The phrase is not relevant to the substance of the commitment, as user safety is already protected under the platform’s policies and applicable laws,”
an investigator said.
TikTok also requested that the required reports be submitted every six months instead of quarterly, as investigators had proposed.
The trial will continue next week.
Source: MLex
