Indonesia bans e-commerce transactions on TikTok

Indonesia has banned e-commerce transactions on social media platforms, namely TikTok, citing that predatory pricing would add too much competition to small and medium-sized enterprises in Indonesia.

The country’s government claims a ban will protect offline merchants and marketplaces.

Earlier this year, TikTok pledged to invest billions of dollars in Southeast Asia, predominantly Indonesia, in the coming years. The focus would be its TikTok Shop.

The mobile platform has 125 million active users in Indonesia alone. A TikTok Indonesia spokesperson said it was “deeply concerned” with the announcement, “particularly how it would impact the livelihoods of the 6 million” local sellers active in TikTok Shop.

However, Indonesia Trade Minister Zulkifli Hasan told reporters that the regulation intends to ensure “fair and just” business competition and protect the data of its users.

Hasan voiced concerns about letting social media become an e-commerce platform, shop, and bank at the same time.

According to a regulation document reviewed by Reuters, the new regulation requires e-commerce platforms in Indonesia to set a minimum price of $100 for items directly purchased from abroad and that all products should meet local standards.

Last year, Google, Twitter, Meta, and other big tech firms almost faced a block by the Indonesian government, too, if they did not register to its new licensing rules. The new rules meant that authorities were allowed to remove content marked as unlawful within 24 hours.

For a short time, PayPal, Yahoo, and several gaming websites did indeed get blocked by the government until they agreed to the new regulations.

Activists at the time argued that the new rules would pose a threat to freedom of expression and privacy. But the government argued that it was to protect consumer data and ensure online content would be used in a “positive and productive way”.

“Our analysis shows that this will be the most repressive regulation of its kind in the region,” said Nenden Arum, from the digital rights group, the Southeast Asia Freedom of Expression Network (SAFEnet).

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