TikTok faces regulatory challenge in Indonesia: E-commerce transactions on social media banned

In an unexpected turn of events, Indonesia has swiftly implemented a ban on e-commerce transactions via social media platforms, leaving TikTok CEO Shou Zi Chew and his ambitious investment plans in jeopardy. The ban, which targets ByteDance’s popular short-form video app with its substantial 125 million monthly active users in the country, has raised concerns among government officials, industry leaders, and consumers alike.

Trade Minister Zulkifli Hasan clarified that the regulation aims to uphold “fair and just” business competition while safeguarding user data. However, lawmakers have voiced concerns about TikTok’s substantial impact on the nation’s 64 million micro, small, and medium enterprises, many of which lack an online presence. These concerns hold significant political weight, especially with national elections, including the selection of a new president, looming just five months away.

TikTok responded, expressing deep concerns about the regulation’s potential impact. Of particular worry is its effect on the livelihoods of 6 million sellers and nearly 7 million affiliate creators who rely on TikTok Shop in the country. As the situation unfolds, the tech giant finds itself navigating a complex regulatory landscape in Indonesia.