Kemenkop UKM Explains 4 Reasons Social Media Must Be Separated From E-commerce

E-commerce illustration (Photo: dock. Unsplash)

JAKARTA - The government has just approved Permendag Number 31 of 2023 concerning Business Licensing, Advertising, Development, and Supervision of Business Actors in Trade Through Electronic Systems (PMSE).

One of these new regulations regulates the separation of businesses between social media and e-commerce or social commerce.

Related to this, the Special Staff of the Minister of Cooperatives and SMEs (Menkop UKM) for Creative Economy Empowerment, Fiki Satari revealed, about the dangers of a platform running a social media business with e-commerce simultaneously.

He said there were at least four reasons that prevented a platform from running the business simultaneously.

First, a platform can monopolize the market. Ironically, the monopoly of the traffic flow is carried out without the user realizing it. They are directed to buy certain products without them realizing it.

"Monopoly occurs if there are platforms that have the ability to control the market, determine unfair prices, different treatments, and determine discriminatory prices based on the data they have," said Fiki in a written statement in Jakarta, on Tuesday, October 3.

Second, platforms can manipulate algorithms. Platforms that have social media and e-commerce simultaneously can easily encourage certain foreign products to appear continuously on users' social media and at the same time make it difficult for local products to appear on social media.

"The manipulation of this algorithm allows the platform to benefit one product and at the same time discriminate against other products," he said.

Third, the platform can take advantage of traffic. Social media has a very large traffic and can now be used as navigation or trigger in purchases at e-commerce.

This purchase trigger should not be captured by e-commerce which is on a single platform with social media. If this happens, there will be no equal playing field in the digital industry in Indonesia.

The fourth reason, said Fiki, is data protection. If you reflect on Law Number 27 of 2022 concerning Personal Data Protection, personal data processing is carried out in accordance with its objectives, because social media aims for entertainment, then the data obtained from there is not to be traded.

"User demographic data and aggregate purchases are very likely to be duplicated as a basis for product creation or affiliated by platforms that run businesses simultaneously," he said.

Meanwhile, Executive Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira said, a platform is indeed natural to be prohibited from running the social media and e-commerce business simultaneously.

Bhima assessed that if the regulation was not regulated, it would have the potential to present unfair trade competition.

"If abroad it is separated, so social media and e-commerce are separated or not," he said.