Monopoly Allegations: The End of TikTok Shop Supremacy in Indonesia?

TikTok’s business expansion in Indonesia has encountered obstacles. The government will prohibit the Chinese company from running both social media and e-commerce businesses at the same time. This is according to Cooperatives and Small and Medium Enterprises Minister Teten Masduki, who said that the ban was intended to prevent business monopolies and had already been implemented by other countries, such as India and the United States.

The government’s biggest concern is the imminent formation of a “deadly giant.” “We know from surveys and research that online shopping is navigated and influenced by conversations on social media. Moreover, the payment system will be the same [via TikTok], financing, and logistics for all of them. This is a monopoly,” he said last week.

The Communications and Information Ministry is reportedly preparing regulations that would prohibit social media platforms from being e-commerce platforms. This means that if the investors behind TikTok and other social media want to enter the e-commerce business, they would have to set up a separate platform that is not linked to social media.

On the other hand, Indonesian E-Commerce Association (idEA) General Chair Bima Laga said the only institution that can determine monopoly is the Business Competition Supervisory Commission (KPPU). “Because there is a market that must be measured,” he said. Bima said that the marketplace having its own payment system was not a monopoly, as Minister Teten claimed; rather, it was a way to make the transaction process easier.