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TikTok reportedly still violating ID govt law despite GoTo partnership

TikTok reportedly still violating ID govt law despite GoTo partnership

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Social commerce platform TikTok is reportedly still violating the Indonesia government’s rule that bans eCommerce transactions on social media platforms.

Teten Masduki, minister for small-medium enterprises (SMEs), said that TikTok has not complied with the regulation, and he has had to reprimand the platform lest the government’s authority gets undermined, according to Reuters.

Don't miss: Tokopedia and TikTok Shop ID finalise strategic partnership

The trade ministry said that it is still considering how to adequately resolve this issue.

As TikTok’s Shop function violates the rule against in-app transactions, it was given a one-week deadline at the time to become a standalone app in late September last year. If it fails to abide by the deadline, the app’s "Shop" wing runs the risk of being shut in the country, according to Reuters.

In fact, TikTok recently completed its strategic partnership with Indonesian digital company, GoTo Group (GoTo) which aims to drive long-term growth for Indonesia's MSMEs and digital economy.

As part of the partnership, Tokopedia and TikTok Shop Indonesia's businesses are now officially combined under the Tokopedia entity which is now jointly owned by GoTo and TikTok as strategic partners in Indonesia.

Under the combined Tokopedia entity, TikTok holds a controlling stake, according to GoTo in a statement.

The integration and migration of the two apps is set to be completed within the trial period which will be in consultation with prevailing regulations.

Additionally, TikTok has committed to invest over US$1.5 billion in the enlarged entity over time, aiming to provide future funding required by the business without additional dilution to GoTo. This arrangement seeks to allow both companies to serve Indonesian consumers and MSMEs more comprehensively.

MARKETING-INTERACTIVE has reached out for more information.

Related articles:
Should Malaysia follow in Indonesia's steps with TikTok Shop's ban?
Indonesian govt gives TikTok a week to spin TikTok shop into separate app
TikTok Shop faces backlash from ID government over unreleased Project S

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