A staff member walks past a TikTok signage in the TikTok office during a press tour of Bytedance and TikTok's offices in Singapore, 29 August 2023. ByteDance Ltd. is the parent company of popular short-video platform TikTok, which has headquarters in Singapore and Los Angeles. EFE-EPA/HOW HWEE YOUNG

Indonesia to regulate social media e-commerce

Jakarta, Sep 25 (EFE).- Indonesia declared on Monday that it would bring a regulation to prevent social networks from integrating e-commerce services amid an ongoing dispute with TikTok, which has promoted its online store in the archipelago as part of its expansion efforts in Southeast Asia.

Trade Minister Zulkifli Hasan said social media platforms would only be permitted to promote goods or services and would be prohibited from facilitating transactions.

“The regulation will be signed tomorrow. We’ve been discussing this for months,” Hasan told reporters.

The minister emphasized that the new regulations intend to prevent the integration of e-commerce within social networks due to potential monopoly risks, forcing them to operate on separate platforms.

The separation will prevent the combination of promotional activities and transactional functions, with a focus on safeguarding personal data from business use.

Hasan said the new regulation would make social media promotions more akin to television advertisements, emphasizing that the primary role of the digital platforms was promotion.

“Advertisements are allowed… They are digital platforms. Their job is to promote,” said the minister.

In the upcoming regulation, Hasan said the government would clearly differentiate between “social commerce” and “social media” platforms.

The measures are not exclusively targeting TikTok.

TikTok, a meta-owned photo and video-sharing social media app promoted videos from the Chinese company ByteDance.

The app has faced scrutiny in Indonesia due to concerns raised by government officials about the application’s integrated electronic store monopolizing the market.

In June, TikTok CEO Shou Zi Chew announced plans to invest billions of dollars in Southeast Asia in the coming years, with a strong focus on expanding its presence in the regional e-commerce sector.

Indonesia, where TikTok debuted in 2021 before expanding to Thailand, Vietnam, Malaysia, the Philippines, and Singapore, is key to its plan.

Despite its rapid growth, TikTok Shop still lags behind larger e-commerce firms in Southeast Asia, such as Singapore’s Shopee and Lazada, owned by China’s Alibaba.

The government has indicated that Indonesia’s move aims not only to address concerns about market dominance but also to protect small and medium-sized businesses from alleged predatory pricing practices by online platforms.

TikTok has expressed criticism of Indonesia’s regulatory plans. A spokesperson, Anggini Setiawan, warned in a statement that these regulations could have adverse effects on innovation, businesses, and users in Indonesia. EFE