TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

The paradox of competition and antitrust issues in e-commerce

There is a trade-off between improving efficiency and fostering competition, for which we need a reliable metric to measure the relative magnitude of each force. 

Damiana Simanjuntak and Doriani Lingga (The Jakarta Post)
Premium
Taipei/Auckland
Wed, June 12, 2024 Published on Jun. 11, 2024 Published on 2024-06-11T12:27:08+07:00

Change text size

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
The paradox of competition and antitrust issues in e-commerce In order: Motorcycle deliverymen working for three different online companies, Gojek, Grab and Shopee, wait for the green light at a crossroads in Jakarta on Feb. 10, 2022. (AFP/Bay Ismoyo)

O

fficials are investigating several of Indonesia's major e-commerce players for potential violations related to anti-competitive behavior. Among them is the case implicating the giant marketplace, Shopee Indonesia, suspected by the Indonesia Competition Commission (KPPU) of engaging in anti-competitive business strategies by offering two delivery options, J&T and Shopee Express (SPX), through sellers' dashboards. 

Before discussing the issue any further, it might be necessary to look at the key concerns associated with the problem. As a leading e-commerce platform, Shopee's actions significantly impact market dynamics. Its integration and potential preference for its own or specific delivery services may affect consumers' choices, directing them to use certain delivery services and potentially creating barriers for other delivery service providers to compete fairly.

This practice can reduce competition in the delivery services market, impacting service quality and innovation. Therefore, Shopee's action in favoring certain delivery services could be viewed as using its dominant position to stifle competition, which may lead to a monopolistic market where Shopee can dictate terms without fear of competition.

Antitrust regulations are intended to create fair competition and overcome market failure, especially by preventing monopolies with their undesirable welfare-deteriorating effects from taking place. Such measures are necessary when firms engage in discriminatory actions which can potentially hinder competition and harm customers. 

While the bigger question is if the practices of e-commerce marketplaces possess sufficient influence to eliminate other market participants, it is equally imperative to critically examine the services they promote on their platforms.

The displacement of inefficient market participants and the emergence of natural monopolies are often inevitable when a firm demonstrates markedly superior efficiency compared with its competitors. Should the courier services preferred by e-commerce platforms indeed exhibit greater efficiency and effectiveness relative to alternative options, these practices might be better understood as catalysts for the development of a natural monopoly rather than as deliberate efforts to impede competition. 

Viewpoint

Every Thursday

Whether you're looking to broaden your horizons or stay informed on the latest developments, "Viewpoint" is the perfect source for anyone seeking to engage with the issues that matter most.

By registering, you agree with The Jakarta Post's

Thank You

for signing up our newsletter!

Please check your email for your newsletter subscription.

View More Newsletter

In reality, although Shopee favors certain delivery services on sellers' dashboards, other services remain available for customers to choose from, and the competition remains relatively intense. However, due to its dominant market position, Shopee's subsidiary delivery service, Shopee Express (SPX), can offer prices that are only marginally lower than those of its competitors.

to Read Full Story

  • Unlimited access to our web and app content
  • e-Post daily digital newspaper
  • No advertisements, no interruptions
  • Privileged access to our events and programs
  • Subscription to our newsletters
or

Purchase access to this article for

We accept

TJP - Visa
TJP - Mastercard
TJP - GoPay

Redirecting you to payment page

Pay per article

The paradox of competition and antitrust issues in e-commerce

Rp 35,000 / article

1
Create your free account
By proceeding, you consent to the revised Terms of Use, and Privacy Policy.
Already have an account?

2
  • Palmerat Barat No. 142-143
  • Central Jakarta
  • DKI Jakarta
  • Indonesia
  • 10270
  • +6283816779933
2
Total Rp 35,000

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.

Share options

Quickly share this news with your network—keep everyone informed with just a single click!

Change text size options

Customize your reading experience by adjusting the text size to small, medium, or large—find what’s most comfortable for you.

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!

Continue in the app

Get the best experience—faster access, exclusive features, and a seamless way to stay updated.