Legal Analysis of Shopee's Monopoly Practices concerning Business Competition in Indonesia

Abstract

The rapid advancement of information and communication technology has profoundly influenced multiple facets of human life, including the trade sector, which has evolved into a digital platform commonly known as e-commerce. In Indonesia, e-commerce has transformed consumer behavior and created significant opportunities, especially for Micro, Small, and Medium Enterprises (MSMEs), enabling them to reach broader markets without extensive physical infrastructure. However, this rapid growth also introduces new challenges, particularly regarding monopolistic practices by dominant platforms such as Shopee. Through a vertical integration strategy, Shopee has expanded its reach into the logistics sector with Shopee Express, allowing it to control logistics processes directly. While this integration can enhance efficiency, it also presents competitive challenges for third-party logistics providers and has the potential to limit consumer choices.This study uses a normative legal research approach to examine alleged violations of Articles 19 and 25 of Indonesia's Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition, specifically regarding Shopee’s practices through Shopee Express. The findings indicate that Shopee’s approach may restrict market access for other logistics providers, creating an environment that stifles competition and undermines consumer choice, the introduction of an integrity pact between Shopee and the Business Competition Supervisory Commission (KPPU) has been a crucial step towards addressing these competitive imbalances. The study concludes with recommendations for stronger regulatory oversight by the KPPU to enforce fair practices and an emphasis on raising consumer awareness.