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Sea unfairly favored its own delivery service, Indonesia says

(May 28): Indonesian antitrust authorities are investigating Southeast Asia’s e-commerce leader Sea Ltd for potentially unfairly favoring its own delivery service over other alternatives.

Online shoppers in Indonesia can choose which company to deliver their purchases, and Shopee, Sea’s e-commerce arm, has implemented an algorithm that prioritizes its own service over other options, including including local competitors, the antitrust watchdog known as KPPU said Tuesday. Shopee’s legal team, present at the event, is expected to respond at a follow-up hearing on June 11.

Indonesia, with around 280 million people, is a key growth market for Singapore-based Sea, as well as rivals such as ByteDance Ltd’s TikTok and Alibaba Group Holding Ltd’s Lazada. If it is found to have broken the rules, Shopee will face potential fines and may have to change how it presents delivery options to consumers.

Shopee is committed “to complying with all applicable regulations and legislation in the Republic of Indonesia,” a Shopee Indonesia spokesperson said.

As part of its supporting evidence, the KPPU said a director of Shopee had also been acting as a senior manager of its delivery services arm since 2018.

“Based on this, PT Shopee International Indonesia discriminated in selecting shipping service companies that are automatically mass-activated on the seller dashboard,” the antitrust watchdog said in a statement .

The agency is also investigating Lazada.