TikTok Shop still violates local regulations, Indonesia minister says

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

TikTok Shop is still facing regulatory scrutiny in Indonesia, even after resuming its operations in December last year through a partnership with Tokopedia.

Teten Masduki, the country’s minister of cooperatives and SMEs, said that TikTok Shop continues to violate local regulations because the platform still allows direct transactions on social media.

“While TikTok is investing in Tokopedia, on the other hand, it is still violating rules,” said Masduki, as reported by CNBC Indonesia.

“We do not have an issue with the investment, but we do have an issue with TikTok Shop, which, in practice, is still integrated with social media,” he added.

Although Tokopedia now handles transactions on TikTok Shop in Indonesia, users can still make direct purchases through the latter’s platform, similar to before its temporary closure in October 2023.

Last month, TikTok completed a deal to acquire a 75% stake in Tokopedia valued at US$2.2 billion, according to GoTo’s latest public disclosure. This partnership allowed TikTok Shop to resume its operations in the country after the temporary closure.

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

In December 2023, Trade Minister Zulkifli Hasan said he would monitor the partnership between TikTok Shop and Tokopedia for the next four months. After that period, his ministry will audit whether any violations still occur.

Masduki will coordinate with Hasan to discuss the issue. He also previously suggested that Hasan revise ecommerce regulations by adding points related to price competition and predatory pricing.

See also: TikTok Shop gets winning hand in Indonesia via Tokopedia mega deal