INDONESIA has banned goods transactions on social media platforms in a new regulation, said Trade Minister Zulkifli Hasan today, as Jakarta aimed to rein in direct sales by major tech firms it said were harming millions of small businesses.

Government officials in recent weeks called for social media and e-commerce to be decoupled, targeting platforms they said engage in monopolistic practices that threaten offline sellers, with some specifically blaming Chinese-owned TikTok.

“This trade regulation has been in force (since yesterday),” Zulkifli told a press conference in Jakarta.

He said social commerce platforms would have a week to comply with the new rule.

The regulation meant social media firms would not be able to conduct direct transactions, but only promote products on their platforms.

Laws in the archipelago nation did not cover direct transactions through social media platforms such as TikTok, Facebook or Instagram before the new regulation.

The new regulation was yet another setback for TikTok, which has faced intense scrutiny in the United States and other nations in recent months over users’ data security and the company’s alleged ties to Beijing.

Indonesia was one of the world’s biggest markets for TikTok Shop and was the first to pilot the app’s e-commerce arm.

But Southeast Asia’s biggest economy has become the first country in the region to act against the platform’s growing popularity in the social commerce space.

The ministry-level regulation – an amendment to a trade regulation issued in 2020 – did not need approval by lawmakers. – AFP, September 27, 2023.