Indonesia Bans Sales Of Goods On Social Media Platforms

Indonesia has banned goods transactions on social media platforms in a new rule, its trade minister revealed Wednesday, as Jakarta intends to rein in direct sales on major platforms it says are harming millions of small businesses.

Calls have grown in recently for a regulation governing social media and e-commerce, with offline sellers seeing their livelihoods threatened by the sale of cheaper products on TikTok Shop and other platforms.

“This trade regulation has been in force (since yesterday),” Trade Minister Zulkifli Hasan told a news conference in the capital Jakarta.

According to him, social commerce platforms would have a week to comply with the new rule.

“Any government would protect local small businesses,” he added, saying the regulation was passed in order to ensure “equality in business competition.”

The regulation means social media firms will not be able to conduct direct transactions but only promote products on their platforms.

“Social commerce can place ads like TV, but it mustn’t be transactional. (They) can’t open shop, can’t directly sell,” he further said.

Laws in the nation did not cover direct transactions through social media platforms such as TikTok, Facebook or Instagram before the new regulation.

The new regulation is yet another setback for TikTok, which has faced intense scrutiny in the United States and other nations in recent times as a result of users’ data security and the company’s alleged ties to Beijing.

“Other countries are banning, we don’t, (we’re) regulating,” Hasan stated.

Indonesia is one of the world’s biggest markets for TikTok Shop and was the first to pilot the app’s e-commerce arm.

However, Indonesia is now the first country in the region to act against the platform’s growing popularity in social media commerce.