By Jet Damazo-Santos ( June 21, 2024, 01:45 GMT | Insight) -- Southeast Asian e-commerce giant Shopee is seeking a behavioral remedy in Indonesia to resolve allegations that it prioritized its own Shopee Xpress service for package deliveries in violation of competition rules against discriminatory behavior and dominance abuse. During a hearing at the Indonesian Competition Commission yesterday, the three commissioners sitting as the commission council approved the request for the remedy and outlined the conditions for its approval.Southeast Asian e-commerce giant Shopee is seeking a behavioral remedy in Indonesia to resolve allegations that it prioritized its own Shopee Xpress service for package deliveries in violation of competition rules against discriminatory behavior and dominance abuse. During a hearing at the Indonesian Competition Commission, or KPPU, yesterday, the three commissioners sitting as the commission council approved the request for the remedy, which is called a behavior change integrity pact (see here), and outlined the conditions for its approval. These include Shopee and its delivery service affiliate Nusantara Ekspres Kilat accepting the “Alleged Violation Report” (see here) presented by KPPU investigators and acknowledging the actions described in it. Shopee would also have to comply with an undisclosed set of terms and obligations over a certain period of supervision, according to the conditions. The commission also stated that if evidence of the same violation by the respondents were found in the future, the KPPU has the authority to handle such violations. “If the same violations are found after the supervision period, the case will be processed as usual,” the Commission Council Chairman Aru Armando said during the hearing, according to a statement. Shopee will respond to the commission’s conditions during the next hearing, scheduled on June 25. According to KPPU investigators, users of Shopee — one of the leading e-commerce platforms in Indonesia — used to be able to choose the type of delivery service, courier and fee for their packages. However, starting from March 15, 2021, Shopee implemented a standardization policy that included automatic activation of Shopee Xpress and another courier, J&T Express Indonesia, on sellers' dashboards, thereby excluding other couriers. This policy allegedly led to a significant increase in Shopee Xpress’ market share from 2020 to June 2023. This action, according to the investigators, violates two articles in the competition law: Article 19, which prevents discriminatory practices, and Article 25, which prohibits business players from using dominant positions to set trading terms that prevent consumers from accessing competing goods or services based on price and quality....
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