TikTok Shop is considered to still violate the rules, what are the contents of the Minister of Trade Regulation regarding Social Commerce?

Merger transaction E-commerce Tokopedia and TikTok have been announced to be completed at the end of January 2024. The integration process has been running since the end of 2023, which is at that time GoTo CEO Patrick Walujo saidt,"E-commerce [TikTok Shop] becomes Tokopedia and transactions will occur on Tokopedia.”

Meanwhile, the trial will take 3-4 months with supervision from the ministry and various related institutions. The Buy Local campaign is the first trial program to be held on December 12, 2023.

However, in the integration process, the Minister of Cooperatives and Small and Medium Enterprises (Menkop UKM) Teten Masduki actually said that TikTok still violated Minister of Trade Regulation Number 31 of 2023 because it still combined social media and E-commerce in one application.

"We take issue with TikTok in practice because the TikTok Shop is still integrated with social media," said Teten when met after an audience with the KPPU, Monday (19/2), as reported by Tempo.co.

Prohibition social commerce

Previous, DailySocial.id reviewed the main contents of the regulations which is a revision of Minister of Trade Regulation no. 50 of 2020. So, what points does the Coordinating Minister for UKM, Teten Masduki, mean regarding this violation?

Minister of Trade Regulation Number 31 of 2023 was signed following the polemic about the operation of the TikTok Shop in Indonesia. Meanwhile, TikTok Shop's services were discontinued in October 2023.

The new rules emphasize that social media is only permitted to facilitate the promotion of goods and/or services. The problem is that buying and selling transactions facilitated by the TikTok Shop service occur in one application, which is TikTok.

In Article 1, the government has provided a clear definition of the platform model social media and social commerce, to differentiate it from Electronic Trading System Operators (PPMSE) in general.

• Verse 17 states that social commerce is a social media organizer that provides certain features, menus and/or facilities that enable traders (merchant) can place offers for goods and/or services.
• Paragraph 18 states that social media is a page or application that allows users to create and share content or engage in social networks.

Meanwhile, Article 21 states that PPMSE is with a model social commerce may only operate as stated in Article 1 Paragraph 17.

• Paragraph 2 states that PPMSE is based on a business model marketplace and / or social-commerce prohibited from acting as a producer in accordance with the provisions of laws and regulations in the field of distribution of goods.
• Paragraph 3 states that PPMSE is based on a business model social commerce prohibited from facilitating payment transactions on its electronic system.

Through this regulation, the government hopes for a business model social media and E-commerce must be run in a separate platform/application, is not integrated as TikTok Shop does.

Teten said he had coordinated with the Ministry of Trade to follow up on TikTok Shop violations.