Indonesia bans business transactions on social media platforms

Indonesia bans business transactions on social media platforms

Indonesia now bans goods transactions on social media, its trade minister said on Wednesday, as it introduced new regulations aimed at curbing sales on the platforms that Jakarta says are harming millions of local small businesses.

“This regulation has been in force since yesterday (Tuesday, editor’s note),” Zulkifli Hasan announced during a press conference in Jakarta, indicating that platforms have one week to comply with the regulations.

According to this new text, platforms can no longer offer the possibility of carrying out direct transactions, but must be content with marketing products.

Indonesian officials have been calling for a separation of social media and online commerce activities for several weeks, believing that large platforms like TikTok, which are widely used in Indonesia, threaten small local businesses.

The passage of this rule is a new setback for the video application TikTok, developed by Chinese tech giant ByteDance, which has come under intense scrutiny in the United States and other countries in recent months due to the security of user data and the company’s alleged ties to Beijing.

According to the company, Indonesia represents a major challenge for the Chinese giant as it is its second-largest market with 125 million users.

The archipelago is also one of the largest markets for its TikTok Shop operations and was the first to test the e-commerce arm of the application.

But Southeast Asia’s largest economy is now also the first country to take measures to restrict its trading activities.

The regulations presented on Wednesday do not require parliamentary approval to come into force.