Trade Ministry Says Instagram and Facebook Apply for Social Commerce Permits

TEMPO.CO, Jakarta - Indonesian Trade Ministry’s Director General of Home Affairs, Isy Karim, disclosed that Instagram and Facebook are applying for social commerce permits, which will allow them to offer sales promotion services on their platforms.

“Yes, they are applying for the permit. So they can only advertise and promote [goods] and act as a liaison office to resolve consumer disputes,” Isy told Tempo at the National Food Agency (Bapanas) office in South Jakarta on Monday, October 16, 2023.

He stressed that Facebook and Instagram operate as social networking sites so when they want to open an advertising service, a social commerce permit is required. Meanwhile, an e-commerce permit is necessary for a platform that wants to provide sales services.

Once the social commerce permit is granted, the company will be given a Foreign Company Representative Office (KP3A) permit to act as a bridge in case of consumer disputes and legal issues. “So KP3A is just a liaison office,” Isy added.

However, Isy emphasized that social commerce is restricted to providing services for direct transactions as regulated by the Trade Ministerial Regulation (Permendag) No. 31 of 2023. 

As widely reported, TikTok Indonesia shut down its TikTok Shop commerce feature on October 4 following the issuance of the regulation. Isy explained that TikTok Shop actually still has a permit as a Foreign Trade Company Representative Office (KP3A). Yet, the China-based short-video app has not applied for a social commerce or e-commerce license, so its activities are limited to social media.

RIANI SANUSI PUTRI 

Editor's Choice: After TikTok Shop; Tanah Abang Traders Urge Govt to Restrict Shopee, Lazada

Click here to get the latest news updates from Tempo in Google News