What recently happened?

The Indonesian Competition Commission (Komisi Pengawas Persaingan Usaha, KPPU) recently assessed the acquisition by TikTok Nusantara (SG) Pte. Ltd. (TikTok) of 75.01% of the shares in PT Tokopedia (Tokopedia) (the Transaction) following mandatory notification of the Transaction. According to a press release dated 28 May 2025, KPPU concluded that the Transaction posed potential anti-competitive risks, citing the following reasons:¹

1. TikTok and Tokopedia are businesses in the same market, the e-commerce sector.
2. There is a significant increase in market concentration based on Herfindahl-Hirschman Index² (HHI) calculations.
3. The Transaction may result in price increases, as both entities hold dominant positions in the e-commerce sector.
4. Tying and bundling strategies may be applied within TikTok’s and Tokopedia’s network chains, which may harm consumers or other businesses, particularly micro, small, and medium enterprises (MSMEs).

Despite having the legal authority to annul a transaction, KPPU has never actually exercised such authority upon finding that a transaction poses potential anti-competitive risks. Rather than annulling a transaction, KPPU will usually give a “conditional approval” that the parties must fulfil.3 As a result of its review of the Transaction, KPPU issued such a conditional approval on 17 June 2025, ordering TikTok and Tokopedia to:⁴

1. ensure that no tying and bundling practices are applied to payment methods and logistics services;
2. ensure they do not abuse their dominant positions, including by engaging in predatory pricing, self-preferencing and discriminatory treatment of products not owned by TikTok and Tokopedia, and do not impose restrictive terms and conditions that prevent sellers or merchants from transacting in Tokopedia or Shop Tokopedia (or TikTok Shop);
3. guarantee that TikTok users are allowed to promote products from other e-commerce platforms outside of Tokopedia and TikTok Shop;
4. ensure that there is no exploitation of market power through unjustified price increases; and
5. ensure equal opportunities and protection for MSMEs to grow on TikTok Shop and Tokopedia.

(In this client update, we refer to the above orders as the Conditional Approval.)

To ensure that the Conditional Approval’s conditions are fulfilled, KPPU ordered TikTok and Tokopedia to submit the following data on a regular basis for two years as of the Conditional Approval date:

1. Every three months, a report on TikTok Shop containing details on the total revenue and its sources, fees charged to sellers and customers, business costs and growth or decline trends.
2. Every six months, a list of all logistics and payment service providers operating in TikTok.
3. Every year, agreements with the two largest and two smallest companies engaged in the provision of logistics and payment services, before and after the Transaction.
4. Every year, agreements with two MSMEs merchants/sellers and two official store merchants on TikTok Shop, before and after the Transaction.

TikTok and Tokopedia’s response to the Conditional Approval

A press release on 11 June indicates that in general, both TikTok and Tokopedia accepted the KPPU’s conditions. However, they proposed certain redactional changes and various amendments to be made to the timeline for delivering the requested data⁵.

In response, KPPU deemed that the changes to the conditions proposed by TikTok and Tokopedia constituted a partial rejection of the KPPU’s original conditions. Consequently, KPPU commenced an examination of both parties to clarify the parties’ partial rejection⁶. Following completion of the examination on 17 June 2025, another press release indicates that both TikTok and Tokopedia accepted the Conditional Approval conditions initially proposed by KPPU, without any changes.⁷

Upon TikTok and Tokopedia’s acceptance of the Conditional Approval’s conditions, KPPU approved the Transaction and stated that it will supervise implementation of the Conditional Approval conditions until 17 June 2027. If TikTok and Tokopedia fail to comply with the Conditional Approval conditions, KPPU will conduct a further examination, after which the parties may be subject to administrative sanctions.

Key takeaways and recommendations

The TikTok/Tokopedia case sets an important precedent for merger and acquisition assessments in Indonesia, as it demonstrates KPPU’s continuing policy of supporting business acquisitions that may have potential for monopolistic practices or unfair business competition by not annulling the relevant transaction, but by imposing stringent conditions and a strict reporting regime.

Although there are no standards or templates for the required documents or proposed actions required for KPPU assessments, KPPU adopts a case-by-case approach and will assess the extent to which a transaction may have an anti-competitive effect based on its particular facts. The greater the concerns over potential anti-competitive practices, the more restrictive the conditions KPPU is likely to request.

The actual contents of the conditional approval issued by KPPU, which forms the basis of the press releases, are not publicly available. Accordingly, this client update is intended to provide a general overview of publicly available information, rather than a detailed inside account of the KPPU’s full reasoning or conclusions.