Indonesia to issue regulation on use of social media for e-commerce
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Current trade regulations do not specifically cover direct transactions on social media.
PHOTO: PIXABAY
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JAKARTA – Indonesia may on Tuesday issue a regulation on the use of social media to sell goods in the country, President Joko Widodo said.
It is a move intended to quell threats to offline markets in South-east Asia’s biggest economy.
Ministers have repeatedly said that e-commerce sellers using predatory pricing on social media platforms are threatening offline markets in Indonesia, with some officials specifically citing video platform TikTok as an example.
“We just... decided on the use of social media for e-commerce. Tomorrow, it will perhaps come out,” said Mr Widodo, who is popularly known as Jokowi, in a streamed video address on Monday.
“What the people are expecting is that the advancement of technology can create new economic potential, not kill existing economies.”
Mr Widodo did not mention any specific companies or offer further details on the regulation, which is being formulated by the Ministry of Trade.
The ministerial-level regulation – an amendment to a trade regulation issued in 2020 – does not need approval by lawmakers.
In Indonesia, most regulations can be issued by the government unilaterally, while a law requires parliamentary approval.
Current trade regulations do not specifically cover direct transactions on social media.
Deputy Trade Minister Jerry Sambuaga said earlier in September that “social media and social commerce cannot be combined”, vowing to ban the mix of the two and citing TikTok’s “live” features which allow people to sell goods.
A TikTok Indonesia spokesman declined to comment. TikTok is owned by Chinese tech company ByteDance.
TikTok told AFP in a statement in September that Indonesia should “provide a level playing field” for the platform.
It argued that new regulation would harm the country’s sellers and consumers.
The company said its app had 325 million South-east Asian users that were active every month, of whom 125 million were in Indonesia. The company has said that there are two million small businesses on TikTok Shop in Indonesia.
United States tech giant Meta also uses e-commerce shops on its social media platforms Facebook and Instagram. REUTERS, AFP
