Blog by Bianca Cuccinello, Senior Associate
Indonesia was one of the first countries to introduce TikTok Shop to consumers around the country, yet they are the first country that has placed a ban on its use.[1] The Indonesian government placed a ban on the use of TikTok shops and e-commerce through social media just last week.[2] The goal is to protect consumers and marketplaces and restrict sellers from predatory pricing on social media that threaten both small and mid-sized enterprises.[3] Just last month, Joko Widodo, Indonesia’s President, warned consumers to be careful with e-commerce; it can be good with regulations, but without the use of regulations, it can turn bad.[4]
TikTok released a statement expressing that they will halt the transactions on their platform in Indonesia, stating “our priority is to remain compliant with local laws and regulations.”[5] The platform had previously pledged to invest billions of dollars in Southeast Asian countries, namely Indonesia, as a push towards building TikTok shop’s e-commerce platform.[6] Although this ban was put in place for the purpose of “creat[ing] a fair, healthy and beneficial electronic commerce ecosystem,”[7] it has caused a variety of concerns throughout the country.[8] A TikTok Indonesia spokesperson stated that the ban is heading towards a path of deep concern with the inevitable effects on the livelihood of over 6 million local sellers who have utilized the TikTok Shop.[9] Transactions made through e-commerce amounted to $52 billion last year, with 5% of those taking place through the use of TikTok shops.[10] It is still too soon to tell the real magnitude this ban will have on the marketplace of sellers who relied on e-commerce through social media, but it is important to stay informed on this decision, in case other countries decide to follow suit.
[1] John Yoon and Muktita Suhartono, TikTok Forced to Close Shopping Feature in Its Second-Largest Market, Tʜᴇ Nᴇᴡ Yᴏʀᴋ Tɪᴍᴇs (Oct. 5, 2023), https://www.nytimes.com/2023/10/05/business/tiktok-shop-indonesia-ecommerce-ban.html
[2] TikTok to halt transactions on its app in Indonesia from Wednesday, Rᴇᴜᴛᴇʀs (Oct. 5, 2023), https://www.reuters.com/technology/indonesia-bans-e-commerce-transactions-social-media-trade-minister-2023-09-27/
[3] Id.
[4] Mariko Oi, TikTok: Social media app shuts shop after Indonesia ban, BBC, (last visited Oct. 7, 2021), https://www.bbc.com/news/business-67002545
[5] Yoon and Shartono, supra note 2.
[6] Id.
[7] TikTok ends retain business in Indonesia after ban on social media shopping, AP (Oct. 4, 2023),
https://apnews.com/article/indonesia-tiktok-ecommerce-ban-china-62e5ef9f366d8cfd4a94427393bb5aba
[8] Reuters, Indonesia bans e-commerce transactions on social media in major blow to TikTok, CNN Bᴜs. (Sept. 27, 2023) https://www.cnn.com/2023/09/27/tech/indonesia-tiktok-ecommerce-ban-hnk-intl/index.html
[9] Id.
[10] Id.