Saturday, September 30, 2023

Indonesia Says TikTok E-Commerce Can Lead to Monopolistic Practice

Arnoldus Kristianus
September 6, 2023 | 2:52 am
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Trade Minister Zulkifli Hasan (left) and SME Minister Teten Masduki (right) give a press statement on imported secondhand clothing in Jakarta on March 27, 2023. (JG Photo/Jayanty Nada Shofa)
Trade Minister Zulkifli Hasan (left) and SME Minister Teten Masduki (right) give a press statement on imported secondhand clothing in Jakarta on March 27, 2023. (JG Photo/Jayanty Nada Shofa)

Jakarta. The Indonesian government is set to follow the lead of India and the United States in prohibiting social media platform TikTok from engaging in e-commerce activities within the country. 

The plan is based on concerns of potential business monopoly, a senior official said on Tuesday.

TikTok has its own digital payment system and logistical support, and allowing it to run e-commerce operations could harm local businesses, Cooperative and SME Minister Teten Masduki said in a statement.

"India and the United States have banned TikTok from simultaneously operating its social media and e-commerce businesses, while in Indonesia, TikTok is currently free to do both," Teten said.

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The minister cited research suggesting that TikTok has integrated online shopping features that impact social media interactions. While TikTok will still be permitted to run a trading platform to some extent, it must not be combined with its popular video-sharing app, which boasts tens of millions of users in Indonesia. 

Teten argued that the extensive user base and algorithmic recommendation system would provide TikTok with an unfair advantage.

"In addition, they have their own payment system and logistical support. This fits into monopolistic business practices," Teten said.

Under the same reasoning, Teten urged online trading platforms in Indonesia to avoid selling their own products or those of affiliated companies in order to prevent monopolistic behavior.

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