Minister of Cooperatives and SMEs, Teten Masduki, has reiterated that TikTok remains in violation of Indonesian regulations due to its conduct of buying and selling activities on its social media platform. The platform, according to Antara news agency, has yet to clearly distinguish between its social media aspect and its e-commerce arm, TikTok Shop, leading to regulatory concerns.
Teten Masduki emphasised that TikTok lacks the necessary legal licences or entities to operate an e-commerce business like other platforms. Initially only licenced as a representative office, TikTok’s facilitation of product sales contravenes Indonesian law, Teten asserted.
In contrast to platforms like Instagram and Facebook, which primarily serve as promotional tools without direct checkout features, TikTok Shop offers an integrated shopping experience where users can both promote and check out products directly on the platform.
Teten called for stringent sanctions against violators of Minister of Trade Regulation No. 31 of 2023, stressing the importance of adherence to regulations and the imposition of penalties, including the possibility of licence revocation.
Minister of Trade Regulation No. 31 of 2023 governs Business Licensing, Advertising, Development, and Supervision of Business Actors in Trading Through Electronic Systems. Enacted on September 26, 2023, this regulation aims to regulate and supervise e-commerce activities in Indonesia.
In an effort to comply with regulatory requirements, TikTok Shop, operating under TikTok, entered into a partnership with Tokopedia, under GoTo Group, on December 12, 2023. This collaboration entails the integration of TikTok Shop into the Tokopedia platform, aligning with the regulations outlined by the Minister of Trade.
Nila Marita, Head of External Affairs at GoTo Group, affirmed the ongoing efforts to comply with Minister of Trade Regulation No. 31 of 2023. She highlighted the migration of data between TikTok and Tokopedia, which is nearing completion, with the shopping, payment, and checkout processes now separated from the TikTok application and integrated into the Tokopedia back-end system.
Nila reiterated her commitment to work closely with the government to ensure compliance with regulations, underscoring the importance of regulatory alignment for the seamless operation of both applications.
As the regulatory landscape evolves, stakeholders continue to navigate the complexities of e-commerce regulations, striving to uphold legal standards while fostering innovation and growth in the digital sphere.
