Unveiling TikTok Shop's Predatory Pricing Strategy: A Threat to MSMEs and a Regulatory Challenge

Abstract

The growth of e-commerce in Indonesia has significantly transformed consumer behavior, particularly with the emergence of TikTokShop as a social-commerce platform that merges entertainment and transactions. However, this integration has also triggered unfair competition practices, notably predatory pricing that harms local MSMEs. This study aims to juridically analyze the predatory pricing practices by TikTokShop and their implications for market structure and consumer protection. The research uses a normative juridical method with a statutory and case study approach. The findings reveal that predatory pricing is conducted through the sale of imported goods below market prices to eliminate local competitors and dominate the market. This strategy creates entry barriers for new players and risks market monopolization in the long term. TikTokShop’s dominance is further solidified by its majority acquisition of Tokopedia, enabling centralized control over distribution and consumer data systems. Although Trade Minister Regulation No. 31/2023 mandates the separation of social media and e-commerce functions, weak enforcement has left legal implementation gaps. Therefore, strengthening the role of the Business Competition Supervisory Commission and updating the legal framework are essential to ensuring a fair and competitive digital marketplace.