Indonesian minister warns TikTok over ‘monopolistic’ practices

Teten Masduki, Indonesia’s minister of cooperatives and SMEs / Photo credit: Cabinet Secretariat of the Republic of Indonesia

Teten Masduki, Indonesia’s minister of cooperatives and SMEs, has threatened to ban TikTok from operating as both a social media platform and a marketplace, labeling this dual role as “monopolistic.”

“India and the United States had the courage to reject and ban TikTok from simultaneously running social media and ecommerce businesses. Meanwhile, in Indonesia, TikTok can do both,” the minister said in a statement.

During a government meeting held on Wednesday, Masduki argued that TikTok could potentially monopolize the market because online shoppers are “influenced by conversations on social media.” He’s also concerned about TikTok Shop having control over payment and logistics systems.

To get the facts straight, India has banned TikTok since 2020 due to geopolitical tensions. However, TikTok Shop remains mostly unrestricted in the US. Only the state of Montana had signed legislation barring TikTok on personal devices.

In addition, TikTok Shop has to rely on third-party payment and logistics providers in Indonesia.

Tech in Asia has reached out to TikTok’s Indonesia office for comments.

To protect domestic small businesses, Masduki also called on the government to prevent overseas retailers from selling directly to consumers.

“Foreign retailers must first go through the normal import mechanism, and then they can sell their products in the Indonesian digital market,” he added.

If they don’t do so, Masduki is certain that “Indonesian SMEs will definitely not be able to compete.”

Previously, Masduki also vocally opposed Project S, which TikTok is developing in the UK. Project S allows TikTok to sell its products within its app, similar to Amazon Basics. However, TikTok has confirmed that this initiative is not available in Indonesia.

The Ministry of Trade is working to revise ecommerce regulations in the country. It’s unclear when this will be released, but among the new rules is a ban on cross-border sales of products under US$100 on ecommerce platforms.

See also: TikTok’s Project S triggers alarm bells in Indonesia