JAKARTA, Sept 25, 2023 (AFP) – Indonesian President Joko Widodo said new regulation on social media commerce could be passed as soon as Tuesday, as Jakarta aims to rein in sales on tech platforms it says are harming local businesses.
Indonesian users spent more money on TikTok than anywhere else in Southeast Asia over the past year, as the app’s e-commerce arm rapidly grew to gain a substantial regional market share and millions of sellers since its 2021 launch.
Laws in the archipelago nation do not cover sales through social media platforms such as TikTok, Facebook or Instagram, but officials in recent weeks have called for social media and e-commerce to be decoupled, taking aim at platforms they say engage in monopolistic practices.
“We just decided in a meeting about social media which are being used as e-commerce. Tomorrow it will perhaps come out,” Widodo said Monday in a video address, without naming any companies.
“The big umbrella of regulations about digital transformation should be made more holistic, and it is being done by the government. So that technological developments… can create new economies, not kill existing economies.”
The ministerial-level regulation — an amendment to a trade regulation issued in 2020 — will not need approval by lawmakers. In Indonesia most regulations can be issued by the government unilaterally, while a law requires parliamentary approval.
Trade Minister Zulkifli Hasan told reporters after the meeting with Widodo that he would sign the regulation soon.
“Social commerce can only facilitate promotion of goods and services, not direct transactions,” he said.
The minister said social media and e-commerce “should be separated”, adding that the government would impose a $100 minimum purchase per transaction on imported goods.
TikTok Indonesia said the announcement raised concerns from sellers who market their products on the platform.
“Social commerce was born to solve a real world problem for local traditional small sellers, by matching them with local creators who can help drive traffic to their online shops,” the company’s spokesperson said in a statement.
TikTok Shop has amassed more than two million Indonesian sellers since its launch.
Indonesia is TikTok’s second-largest market, with 125 million users, according to company figures. It is owned by Chinese technology giant ByteDance.
TikTok’s chief executive Shou Zi Chew visited Jakarta in June, pledging to pour billions of dollars into Southeast Asia in the coming years.
