TikTok ban prompted the government to further regulate the separation of social media and e-commerce businesses, as well as cross-border commerce for fair competition.
Heaptalk, Jakarta — The Indonesian Government has taken a measure regarding the business operations of TikTok in Indonesia (09/06). Minister of Cooperatives and SMEs Teten Masduki prohibited the China-based social media platform from running a social media and e-commerce business simultaneously in the country as it could lead to a monopoly.
The Minister approved the platform conducting commerce activities but not to be merged with social media. During a Working Meeting with Commission VI at the House Representatives (09/04), he voiced, “From research, from surveys, we know that people navigate online shopping, influenced by conversations on social media. Not to mention payment systems, logistics, they (the platform) manage everything. This is called monopoly.”
This decision followed similar rejections by two other countries, namely the United States and India. “India and the United States dare to object and ban TikTok from running social media and e-commerce businesses simultaneously. Meanwhile, in Indonesia, TikTok can run both businesses simultaneously,” said Teten.
According to Teten, the government needs to regulate the separation of social media and e-commerce businesses. In addition, cross-border commerce also requires special regulations to enable domestic MSMEs to compete in the Indonesian digital market.
Foreign retailers are prohibited from selling products directly to consumers
“Retailers from abroad are no longer allowed to sell their products directly to consumers. They must enter (Indonesia) through the normal import mechanism first, after that they can sell their goods on the Indonesian digital market. If they sell their products directly to consumers, Indonesian MSMEs will definitely not be able to compete as our MSMEs have to apply for distribution permits, SNI (Indonesian National Standard certification), halal certification, and so on,” he explained.
Teten further conveyed the need for regulations that prohibit digital platforms from selling their own products or products originating from their affiliates. That way, digital platform providers, including TikTok, will not manipulate their algorithms to provide fair business practices.
In addition, the government should forbid import activities for products that can be manufactured domestically. The government also needs to regulate the prices of goods imported into Indonesia. According to him, only goods priced above US$100 will be allowed to enter Indonesia.
“The government also needs to ban goods that have not been produced domestically even though the price is below US$100. This is intended to allow Indonesian MSMEs to produce these goods,” concluded Teten.
