According to allegations made by a cabinet minister, TikTok continues to violate Indonesian laws that prohibit in-app transactions.
According to allegations made by a cabinet minister, TikTok continues to violate Indonesian laws that prohibit in-app transactions.

TikTok Faces Scrutiny in Indonesia Over In-App Transactions

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Despite recent developments, the Chinese short video app TikTok remains at odds with Indonesian regulations prohibiting in-app transactions, according to a cabinet minister’s statement on Tuesday. 

This revelation follows TikTok’s acquisition of Indonesia’s leading e-commerce platform as part of its efforts to relaunch its online shopping services in the country.

TikTok’s Bid to Revive E-Commerce Services:

TikTok’s foray into e-commerce faced a setback when Indonesia banned online shopping via social media platforms, citing concerns about safeguarding the interests of smaller merchants and protecting user data. 

The closure of TikTok’s e-commerce service, TikTok Shop, in response to the ban marked a temporary setback for the platform in Indonesia.

In a strategic move to reenter Indonesia’s e-commerce market, TikTok’s parent company, ByteDance, finalized a deal to acquire a 75.01% stake in Tokopedia, Indonesia’s largest e-commerce platform. 

The acquisition, valued at $840 million and completed in December, positioned TikTok to leverage Tokopedia’s extensive user base and infrastructure to resume its online shopping operations.

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Government Concerns and Ministerial Response:

Teten Masduki, Indonesia’s Minister for Small-Medium Enterprises (SMEs), reiterated concerns regarding TikTok’s compliance with regulatory frameworks, particularly about the ban on in-app transactions. 

Masduki emphasized the importance of TikTok adhering to Indonesian regulations and warned of potential repercussions if the platform failed to comply.

The Chinese App Response and Government Action:

As scrutiny mounts, TikTok has yet to formally respond to non-compliance allegations. Meanwhile, the Indonesian trade ministry is deliberating on appropriate measures to address the situation, underscoring the government’s commitment to upholding regulatory standards in the digital sphere.

TikTok’s Investment Plans in Southeast Asia:

Despite regulatory hurdles, TikTok reaffirmed its commitment to investing substantial sums in Southeast Asia, with Indonesia positioned as a key market due to its status as the region’s largest economy.¬†

The platform’s investment plans underscore its long-term strategic vision for expanding its presence and influence in Southeast Asia.

Joshua Skate

Joshua Skate is a prominent contributor at Insider Los Angeles, known for his vibrant storytelling and deep dive into the city's culture, trends, and hidden gems. His pieces bring to life the unique spirit and diversity of Los Angeles, making him a go-to source for all things LA.

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