The Indonesian government has taken a decisive step to ban e-commerce transactions on social media platforms.
TikTok, one of the major social media companies impacted, said this move will particular affect its sellers who rely on TikTok Shop, according to ABC. In Indonesia, Southeast Asia’s largest economy, TikTok has two million small vendors selling on its platform.
Finding Common Ground
While companies including TikTok will feel the strain of the ban, the Indonesian government firmly believes that it will level the playing field, especially for offline merchants.
Through this ban, Indonesia is calling out social media giants—and particularly the marketplace and social media sellers that sell their goods within the platforms—on their unfair business practices. As ABC reported, the government is “accusing them of predatory pricing.”
In a prepared statement, Zulkifli Hasan, Indonesia’s Trade Minister, said that the new rules “create a fair, healthy and beneficial electronic commerce ecosystem by prohibiting marketplaces and social media sellers from acting as producers and facilitating payment transactions on its electronic systems.”
Regulating Social Commerce
There’s been a growing global trend surrounding the practices of e-commerce and social media platforms. And as a result, a call for regulation is necessary.
More countries will likely follow suit and impose similar bans, particularly if they too feel that the playing field isn’t equal for online and offline merchants.
We’ve already seen some of this go into effect and expect more change will come within the next few years. For example, the U.S. government has launched antitrust investigations and lawsuits against big tech companies such Google, Amazon, and Apple, accusing them of abusing their market power and harming consumers and competitors.
PaymentJournal also reported on how lawsuits in Europe forced Amazon to stop using private data from merchants that it competes with.
