Indonesia’s Business Competition Supervisory Commission (KPPU) has raised concerns over the recent merger between TikTok Shop and Tokopedia, warning that their consolidation may lead to monopolistic practices and unfair business competition. 

In response, KPPU investigators have recommended four binding conditions that the companies must fulfill to ensure compliance with Indonesia’s competition laws.

The warning comes after TikTok acquired a 75.01 percent stake in Tokopedia from GoTo Gojek Tokopedia at the end of 2023, with the transaction finalized in January 2024. The merged e-commerce operations are now controlled by TikTok under PT Tokopedia, in a deal valued at over Rp5 trillion (US$306 million).

“This transaction brings together two major players in the same market − physical goods e-commerce in Indonesia − resulting in a significant increase in market concentration,” KPPU said in a statement released on Wednesday, May 28, 2025.

The KPPU’s preliminary findings were presented during a hearing for Case No. 01/KPPU-M/2025 held on Tuesday, May 27, 2025 at the KPPU headquarters in Jakarta. The session was led by Commission Chair Budi Joyo Santoso, along with members Aru Armando and Gopprera Panggabean.

Concerns and conditions

Based on a thorough review, investigators identified several potential risks, including a rise in market dominance reflected by a higher Herfindahl-Hirschman Index (HHI), the likelihood of price increases due to unilateral market power, and the possibility of anti-competitive practices like tying and bundling that could harm consumers and small businesses.

To mitigate these risks, the KPPU has required TikTok and Tokopedia to comply with four main conditions:

• Open payment and logistics options

Ensure that payment and logistics services remain flexible and are not tied to bundled offerings that could restrict consumer choice or disadvantage other businesses, especially Miscro, Small and Medium Enterprises (MSMEs).

• Prevent abuse of dominant market position

Prohibit practices such as predatory pricing, self-preferencing, and product discrimination. Sellers must not face unreasonable barriers when using Tokopedia or Shop|Tokopedia platforms.

• Account freedom for promotions

Allow TikTok users to promote products from other e-commerce platforms beyond Tokopedia and Shop|Tokopedia, supporting a competitive digital marketplace.

• Fair pricing and equal opportunity

Avoid unjustified price hikes and ensure equal opportunities for MSMEs to grow on both platforms without being sidelined by larger players.

To monitor compliance, the KPPU has requested a set of data from TikTok and Tokopedia, including quarterly reports for two years, lists of logistics and payment partners, and copies of agreements made before and after the acquisition.

Although the investigation did not find major barriers to entry for new competitors or complete market foreclosure, KPPU emphasized the significance of network effects that could be strategically leveraged to suppress competition.

The next hearing is scheduled for June 10, 2025, where TikTok and Tokopedia are expected to respond to the KPPU's findings and conditional approval proposal.

As of this publication, TikTok Shop Tokopedia has not provided an official response to the matter.