Tiktok Shop still violates govt regulations, says Indonesian minister

Tiktok Shop still violates govt regulations, says Indonesian minister

FILE PHOTO: The TikTok logo is pictured outside the company's U.S. head office in Culver City, California, U.S., September 15, 2020. REUTERS/Mike Blake/File Photo

Indonesian minister of cooperatives and small and medium enterprises Teten Masduki on Monday said that Tiktok Shop continues to violate government regulations despite its acquisition of Tokopedia and subsequent resumption of operations.

Speaking to local media, the minister stressed the need to separate social media and e-commerce operations, in line with Trade Minister Regulation 31/2023 concerning e-commerce business licensing and supervision.

“We don’t oppose TikTok’s investment in Tokopedia. However, the issue lies in the continued integration of TikTok Shop with the social media platform,” Masduki said, as first reported by CNBC Indonesia.

Nevertheless, he clarified that he is unable to take further action as the authority to address such matters falls under the jurisdiction of the minister of trade. Masduki expressed readiness to coordinate with trade minister Zulkifli Hasan to address the violation accordingly.

DealStreetAsia has reached out to TikTok Indonesia for comment.

Tokopedia announced the completion of the merger transaction with ByteDance’s short-video platform TikTok in late January. The businesses of Tokopedia and TikTok Shop Indonesia are now formally merged under the PT Tokopedia entity, which is co-owned by GoTo and TikTok, with the latter holding a controlling stake.

Back then, GoTo said that the ongoing integration and migration process within Tokopedia and the TikTok app in Indonesia is progressing well and is expected to conclude within the trial period, in consultation with the relevant ministries and adherence to prevailing regulations.

Tokopedia also has made organisational changes including the appointment of former Bytedance executive Vonny Ernita Susamto as its new president director.

Masduki first voiced his concern over TikTok Shop in September last year. TikTok Shop was said to be a potential monopoly, and the minister threatened to shut its shopping platform. TikTok Shop was eventually banned in late September 2023 and resumed operations about two months later after GoTo’s Tokopedia announced its mega deal with ByteDance-owned company.

At DealStreetAsia’s Indonesia PE-VC Summit 2024 in January, GoTo CEO Patrick Walujo said that TikTok has saved Tokopedia from the fierce competition in the Indonesian e-commerce industry.

Edited by: Joymitra Rai

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