Indonesia Officially Bans E-Commerce Transactions on Social Media

Concern has been growing recently among various parties relating to micro-, small- and medium-scale enterprises (“MSMEs”) and more generally across the nation regarding social-media platforms (“Social Media”) that engage in trading activities via electronic systems (perdagangan melalui sistem elektronik – “PMSE”). This concern centers on the fact that conventional merchants and MSMEs are being negatively affected by such online trade and are sustaining significant losses.[1] In this regard, the Minister of Trade (“Minister”) has only amplified this concern by affirming that any Social Media that simultaneously engage in PMSE business activities have the potential to become highly profitable through the use of Social Media user algorithms that assist in the displaying of product advertisements that are closely matched to the preferences of Social Media users.[2]

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